Banks have announced Zelle as their product in the payment-transfer space. Zelle would be a direct competitor to Venmo, owned by PayPal, and includes features such as instant clearing of money from one bank account to another (video above published Oct 24, 2016)
Domains referenced:
- zellepay.com
- venmo.com
0:00 America's biggest banks will be
0:01 connected through a new money transfer
0:03 app called Zelle will compete against
0:06 quite a few transfer apps that are
0:07 already in the market for joining us to
0:09 break all this down as Mark spoon our
0:11 editor-in-chief at tom's guide mark
0:12 thanks for joining us today thank you
0:14 let's talk about this app what is l how
0:16 many banks will connect with it or use
0:18 it and how does it work
0:20 sure so just imagine being able to send
0:22 your friends money for rent or for pizza
0:25 or for anything else as a direct deposit
0:27 right into their account using an app
0:30 and that's the idea behind shell they're
0:31 like you said there's a lot of
0:32 competitors out there but they have a
0:34 couple of advantages one is that they
0:36 have a lot of the major banks most of
0:38 them five of them including citi and
0:40 wells fargo and the there's not going to
0:43 be any transaction fee as part of this
0:46 instant deposit which is another feather
0:48 in their cap and I'm glad you brought up
0:50 some the competitors here venmo for
0:51 example which is owned by paypal I mean
0:53 there's already a verb out there i have
0:55 many friends who say that their venom
0:57 owing money from dinner for example
0:59 that's right so so I get why the big
1:01 banks want to have their own specific
1:03 service but how's it going to compete
1:04 against all of these other types of apps
1:06 are already out there
1:07 yeah i mean so you're right venmo has a
1:09 huge head start and depending on what
1:10 numbers you look at they could have
1:12 upwards of a million people that are
1:14 using it for a month already
1:15 and in the first quarter of a 2016 that
1:18 had 3.2 billion dollars and money
1:21 transacted among their users and that's
1:22 over a hundred percent increase from the
1:24 following year
1:25 what cell brings to the table is unlike
1:27 some competitors there isn't that
1:29 transfer fee for making an instant
1:31 deposit into someone else's account and
1:33 it truly is instant sometimes with venmo
1:35 and others it can take up to a couple of
1:37 days so that instant gratification
1:38 especially among Millennials is really
1:40 important because you want to make sure
1:41 that money is still there when taking
1:43 that transaction so and also obviously
1:47 but the support of the banks is is
1:48 really good for them but i also think
1:49 that Millennials could look at them with
1:51 a little bit of distrust because it is
1:53 run by the big banks as opposed to a
1:55 third party like paypal and in light of
1:57 all this and as especially this idea
1:59 that it's near instant clearing of the
2:01 money which to me would be key
2:03 yeah do you think she'll could actually
2:05 beat some of these rivals it could mean
2:08 I think a lot of it will depend on
2:09 marketing but at the same time you have
2:12 Zelle whose
2:13 they're stepping up their game and keep
2:15 in mind you know soon so the memo has
2:17 been out for awhile and they're adding
2:19 other features to their app like the
2:21 ability to use the your account when
2:24 you're making payments online and
2:25 through apps like they're working with
2:27 mantri right now for food delivery and
2:30 game time for a game tickets so in a way
2:32 they're trying to become more like Apple
2:33 pay and with shell not coming out until
2:35 2017 they're going to have to innovate
2:38 behind the scenes to make sure that
2:39 they're at parity with their rivals when
2:41 they finally come to market that's a
2:43 good point marks Punar thanks for
2:44 joining us thank you for watching I
2:46 Morgan Brennan have a great day
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