Hacker News Reader

Comment by toomuchtodo | Hacker News Reader

Zelle [1] moves money in minutes, with no charge [2], as long as your bank is a participating institution [3] and you've previously enrolled. Hard to see Paypal competing against a syndicate owned by major financial institutions (Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, US Bank, and Wells Fargo).

At the same time, all of these efforts die as soon as ACH modernization arrives [4], as shown by SWIFT instant payments (which occur in a matter of seconds between institutions) [5][6].

Disclaimer: No affiliation, just a fintech enthusiast.

[1] https://wikivisually.com/wiki/ClearXchange

[2] https://www.zellepay.com/support/how-long-does-it-take-to-re...

[3] https://www.zellepay.com/get-started

[4] https://fedpaymentsimprovement.org/

[5] https://www.swift.com/your-needs/instant-payments

[6] https://www.npr.org/templates/transcript/transcript.php?stor...

View on HN

This is totally anecdotal, but I (and apparently many other people online) have had pretty terrible experiences with Zelle, moreso than I've noticed with other fintech services.

A family member tried to send me money, which used to work perfectly fine via the bank's older transfer methods (including PopMoney), but once the bank switched to Zelle they somehow lost the transaction completely because my bank had yet to integrate with it.

Zelle's app and help pages were terrible and directed me to create an account and download the app to get the money out. I did that and the money was still nowhere to be found. The bank customer service wouldn't touch it because it was Zelle's fault, and my family member apparently had to wait on hold for an extremely long time with Zelle to get it sorted out and get the money back in their account. I can only imagine how much of a nightmare that could have been for less financially-secure or tech-forward people.

It works out of the box with chase and you don't need the app, and you don't need to fill out any forms to make it work.

This makes checks obsolete for me. The only advantage they had was 0 fees, but now zelle is my best option for price and speed.

Same with Bank of America. I can send my fiancée (and vice versa) money through Zelle (she has Chase) fairly quickly.

Venmo has pretty strong network effects, to the point that its users use “Venmo” as a verb. That will be tough to overcome.

Venmo doesn't have the capabilities of a checking account, which most adults need and Venmo is unlikely to offer (direct deposit, bill pay, etc).

I didn't read the previous comment as a suggestion that they were looking to Venmo as an alternative to a checking account, but rather as a purse where money goes temporarily until it ends up at the final destination: said checking account (or another user or service that takes payments from venmo). That's how I and many services I use-like the furniture movers I paid a few weeks back-the App

Or have I misunderstood something, perhaps?

My thesis is Venmo is a feature, not a product. Real banks will eventually replace the need for it (technically, they already have; the UX needs some catching up).

Zelle is usable out of the box with Chase and Bank of America in the respective banks apps (and I'm guessing other participating banks) it's kind of a paypal for banks that just works.

That may be true, but it doesn’t mean customers are going to use it. The fact that millions of 20-30 year olds in the USA tell each other “Venmo me” is quite a bit of inertia to overcome.

Then again, perhaps Zelle will capture the non 20-30 demographic, which is presumably quite large. Most 20-30 year olds have both their banking app(s) and Venmo installed, whereas many in the 30+ demographic have only their banking app.

In the 30+ demographic, Zelle is a new entrant to the “peer-to-peer payments” market, and has a first-mover advantage. Since this demographic is not as intimately familiar with p2p payments as the 20-30 demographic, Zelle has the opportunity to concept of peer-to-peer payments. That is, Zelle has a clear playing field in the battle for the “tipping-point” mindshare required to solidify its first-mover advantage in certain markets.

It would be interesting to map the “real” human social graph, and then overlay app usage onto it.

When we found out about Zelle (which our banks advertise) we switched to it immediately (me and my fiancée) it involved no effort on our part, just maybe telling them what our email was so other people can send us money by email. The rest was handled by our banks. If venmo can be that frictionless then I can see them taking over, but I wont bother installing venmo or giving it a shot now. I'm more likely to paypal someone funds if they don't have Zelle or Google Wallet.

I guess I fall somewhere in the 20-30 market though.

I use both Venmo and Zelle (through BOA). Zelle gets used by me for "real" transfers that are recurring or large one-offs. The large one-offs I still confirm in advance, because people can have multiple bank accounts and not know where their email/phone is linked. (I think it's the last one setup).

For anything small or group-related, I use Venmo. Largely because everyone (that I've ever exchanged $ with) in my social group uses it, and it's quick and easy. Examples include: food splitting, having one person buy event tickets and paying them back, airbnb/party costs, and fantasy football due collection.

So I agree, Venmo is going to be tough to overcome, I don't see anyone in my group switching to Zelle anytime soon. Zelle would have to do a lot of marketing to even get people to understand that they can do it. I was skeptical the first time I sent money with Zelle and the only reason I tried it was because BoA replaced their transfers with it.

All of your lofty pronouncements are predicated on the opinion that speedier money movement is in high demand which has been shown over and over to be false.

The demand and uptake of person to person funds transfers in other markets is obvious.

People don’t care the money moves drastically faster, banks most definitely want to save on the costs of these transactions.

Unfortunately the only targets for ACH modernization right now are same-business-day, which means if I send money in the morning it won't get there till the evening, and if I send it Friday at 6pm, you won't get it until Monday at 5:30pm.

The downside to Zelle is the sending limit, which is pretty low for any sort of business transaction.

Reply on news.ycombinator.com