Zelle abandons autonomous P2P payments application

Zelle closed its stand-alone payment application between individuals. This decision should not represent a major disruption for users of Fintech services who were already passing through another channel to make their payments between individuals. Zelle will now offer its services only via partner banks.

FACTS

• Announced in October 2024, the closing of Zelle's self-sustaining payment application between individuals was finally announced a few days ago. This operation represents the implementation of a decision that had been taken upstream, and that should not have a major impact on FinTech.

• Zelle points out that the vast majority of its transactions are already carried out through banking institutions rather than through its autonomous application, and it is the service via banks that Zelle will continue to provide.

• Since the beginning of April, Americans who used its autonomous application have had to re-register with a financial institution offering Zelle services.

ISSUES

• Countering Regulatory Threats : At the end of 2024, the Consumer Financial Protection Bureau (CPPB) Finalised regulation of federal oversight of seven of the most popular digital payment applications in the United States. And this monitoring concerned solutions brought by leading players such as Google, Apple, Venmo, Amazon, Paypal or Zelle. This decision also opened up a further reflection, always carried out by the Commission, on the consultation protection of digital payments. To deal with the accusations of the PSCB and even a complaint filed, Zelle preferred for her part report baseless attacks (the PSCB subsequently had withdrawn its complaint against Early Warning Services (EWS), the payment network operator Zelle). But the closure of its autonomous application and the compulsory passage of its services by traditional banks allow it to respond in part to criticism, relying on partnerships to justify the seriousness of its service.

• Meeting real needs Zelle also makes a common sense decision regarding the actual uses of her services. Its autonomous application made it possible, in fact, to validate only 2% of the transactions actually carried out by its customers. They already used the majority of the services operated via banks.

PERSPECTIVE

• Zelle has over 150 million U.S. clients using its services. FinTech is one of the main names of alternative players offering financial services.

• Launched in 2017 with the support of 30 banks, Zelle is an alternative to Venmo. According to the figures put forward by Zelle, in 2024 the users of its services sent themselves no less than $1,000 billion.

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