Mobile app gets cash to friends faster

“Most people think when they send money in those apps it goes right away. The notification goes but it usually takes two or three days to wind through the old systems that are in place,” Zelle spokesman Greg Jawski said. “Zelle will take all that away. Money will be available instantly.”

Like many third-party services, there’s no cost to send or receive money with Zelle.

The Zelle platform was built by Early Warning Services, an Arizona-based company that has long been a leader in fraud prevention and monitoring.

What really sets the system apart, though, is the buy-in it has from banks. Among those participating are JP Morgan Chase, the nation’s largest bank; Bank of America; Citizens Bank; Fifth Third Bank; KeyBank; PNC Bank; U.S. Bank, and Wells Fargo.

All together, Zelle says the service will be available to more than 86 million U.S. mobile banking consumers over the next year.

Cincinnati-based Fifth Third Bank was one of the first to roll out the service, beginning Friday.

“It really provides our customers with a lot of flexibility when they're either managing their money, paying other people, [or] paying bills they have between individuals,” said Larry McClanahan, director of digital delivery for Fifth Third. “It's a super flexible service that is mobile-enabled and easy.”

For Fifth Third, Zelle is replacing its own in-house person-to-person money transfer program called Popmoney. The bank said that program, launched in 2011, was used by thousands of customers on a monthly basis. However, it wasn’t free — it cost between 99 cents and $2.99 to use — and wasn’t available as a mobile application.

Bank officials expect significantly higher usage of Zelle.

Person-to-person money transfers have been growing significantly in recent years. Javelin Strategy & Research noted in a recent report that U.S. consumers moved nearly $500 billion that way last year, with one in three consumers using an online or mobile service to do so.

By 2021, Javelin expects that figure to be one in two consumers — meaning 129 million people will use person-to-person money transfers.

Fifth Third expects high adoption from millennials, who generally are more apt to use those types of services, but Mr. McClanahan said initial data suggests it’s being used by a diverse set of customers.

Mobile banking in general is becoming more accepted, making these types of services more appealing, Zelle argues.

Tom Trebilcock, senior vice president of digital for Pittsburgh-based PNC Bank, said his bank sees a number of potential uses for Zelle, ranging from roommates splitting rent payments to parents of college students helping out with bills.

“There’s use and acceptance and interest on the entire spectrum of customers that we serve,” he said.

PNC expects to launch Zelle within its mobile app in the coming weeks.

Eventually Zelle wants to launch its own standalone app. Until then, money can be sent to people whose financial institutions aren’t using the system, though it will be work essentially as a traditional automated clearinghouse deposit. Zelle also hopes to add more partner banks in the future.

Ref: https://www.toledoblade.com/local/2017/06/28/Mobile-app-gets-cash-to-friends-faster.html