Sean Loosli, head of consumer and small business payments at Early Warning Services argues Zelle is valuable to banks because it offers them more control over the customer experience. Customers whose banks offer Zelle are more likely to use other products their bank provides, have higher balances or carry more of their funds with that bank, according to Loosli. “The more products you have with one bank, the more likely you are to stay with that bank, and put more of your assets with that bank or that credit union,” he says.
Zelle is popular for payments that have traditionally been made using paper checks, including rent payment and gifts. It offers advantages for consumers like increased privacy — the sending party does not need to share their bank account number or routing number, which appear on paper checks — and the fund transfers happen within minutes. The payments are settled over the Automated Clearing House (ACH), The Clearing House’s real-time payments (RTP) network or through card networks like
A growth driver for the service (and its high dollar volume of transactions) is its increasing adoption by businesses, which have traditionally depended on getting paid by paper checks. Zelle has become popular among smaller, service-oriented businesses which are attracted by the fee-free and near-instant settlement it offers. Accepting payment over Zelle also means small businesses are able to avoid the Visa and Mastercard fees charged to merchants who accept payment through bank cards. While Zelle is finding success as a check alternative, Thurlow notes that paper checks are the more economical option from the bank perspectiveInclude
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