An early analysis of the marketing of Zelle as a peer-to-peer payments alternative to PayPal, Venmo and Square by Mintel Comperemedia shows that most marketing to date is being done by the biggest banks. Is this enough to move market share?
When it comes to peer-to-peer payments, Venmo has a big enough market presence to become a verb (“I’ll Venmo you the money I owe you right now”). With $17.6 billion in payments processed in 2016, Venmo is the largest player in an increasingly competitive P2P digital payments ecosystem. Despite this early lead, new entrant Zelle believes the market for P2P payments is far from mature.
In news reports covering the Zelle introduction earlier this year, many called Zelle’s launch a “war on Venmo,” or a “Venmo killer.” But, is Zelle really going after the Millennial market segment that is already accustomed to ‘Venmoing’, or are banks trying to reach the mass market – including older customers who may just be learning about digital payments?
The foundation of Zelle isn’t new. It is, in fact, a re-branding of the bank-owned clearXchange peer-to-peer payments network, run by Early Warning. The network allows customers of participating banks and credit unions to make instant payments to each other, and through partnerships with payment processors, Visa and Mastercard. Given that the existing P2P services from partner banks roll into the Zelle brand, the product has an established user base (and inflated growth numbers when measuring ‘brand’ penetration).
Marketing to P2P Users and Non-Users
Zelle officially launched in June and is in the early stages of brand awareness and market penetration. According to reports, Zelle’s marketing strategy is to focus on a consistent branding of Zelle, emphasizing security and the speed of payments using a trusted source — rather than the social element which…