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Bloomberg
Nineteen US financial firms — including titans such as JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. as well as regional lenders and credit unions — have signed up for a new real-time payments network dubbed Zelle.
The venture, replacing an existing system called clearXchange next year, will be accessible to more than 76 million mobile banking customers when it starts, according to a statement Sunday from Early Warning, the bank-owned entity handling the project.
The move is part of a tech upgrade and branding push by traditional financial firms eager to dispel their industry’s image as slow, after past decades in which transferring funds between institutions often took days. Silicon Valley upstarts have been pushing into their turf with virtually instant payment systems such as PayPal Holdings Inc.’s Venmo in recent years, even as a growing number of banks began matching their speed.
“The CEOs of these banks got together and said ‘It’s time to make this real,’†Paul Finch, chief executive officer of bank-owned Early Warning, said in a telephone interview.
‘Speed, Agility’
Zelle is short for gazelle, which Finch said “conveys speed and agility.†The system lets consumers send money to one another using an e-mail address or mobile phone number registered with their financial institution.
Users will be able to arrange real-time transfers online or, beginning next year, through Zelle’s consumer mobile app.
U.S. households made more than $1.2 trillion in person-to-person payments in 2014, according to Aite Group. About one-fifth of that was processed by non-banks like PayPal or Square Inc., Aite’s research shows.
Other firms set to use Zelle include Citigroup Inc., Morgan Stanley, Bank of New York Mellon Corp., U.S. Bancorp, Capital One Financial Corp., PNC Financial Services Group Inc. and BB&T Corp. In the meantime, Finch says, the venture aims to build out the network to make it easier for additional regional and community lenders to join.