CO-OP Enables Zelle® P2P Payments
CO-OP now offers Zelle® person-to-person (P2P) payments. ESP is working with CO-OP to build the communication rails, leveraging our existing partnership with the ATM/Debit and Shared Branch infrastructure.
In short, Zelle® is an easy way to send money directly between almost any U.S. bank accounts within minutes. Using just an email address or mobile phone number, credit union members can now quickly, safely, and easily send and receive money with more people, regardless of where they bank.
Look up friends from your contacts.
Enter the amount you want to send.
Your money is sent!
Why Zelle® and Why Now?
Due to the effects of the global pandemic, P2P payments have really taken off. Zelle® reported a 74% increase from Q1 2020. And we’re talking huge numbers here: $106 billion was sent through the Zelle Network® on 392 million transactions during Q1 2021. With the restrictions of social distancing and work from home limiting direct personal contact, consumers in droves looked for a solution that would allow them to make payments to individuals directly from their bank accounts using their smartphones.
What Zelle® Is and What it’s Not
An analogy that best describes Zelle® would be “an instantaneous digital check with guaranteed funding.” Instead of the steps of writing out a paper check, delivering the check, endorsement, deposit, funds processing, and waiting for the check to clear, Zelle® simply moves funds between accounts. Plus, it’s FDIC insured.
But Zelle® is not another bank account. Unlike PayPay or Venmo, you cannot store money in your account. You cannot use it to purchase goods and you cannot share your activity on social networks like Venmo. You also cannot use credit cards for payments.
Another issue to consider is that the payee must also have a Zelle® account in order to receive payments. But frankly, if you’ve already had a mobile banking app on your smartphone, you’re more than capable of downloading the app and completing your profile with your banking information.
What Does It Mean for ESP Clients?
If a significant demographic of your credit union is Gen Z, you might have already have been asked about Zelle®. Having a digital strategy that includes P2P will continue to grow your membership.
According to CO-OP, “client institutions need only have CO-OP account-based technology in place and have the ability to offer Zelle® within their mobile banking solution to get started.”
Where to Start
If you are interested in learning more about the potential of Zelle®, please contact CO-OP as you will need an agreement in place for this solution.