Peer-to-peer payment systems have become a popular means of transferring money during prison epidemics. People avoid ATMs and replace cash and checks with digital money transfers. Zelle now has a lot of eyes on them, and it’s not just from consumers. According to the Wall Street Journal, financial institutions are also keeping an eye on them. So much so that companies are debating a plan to bring Zelle to the checkouts of large retailers.
Zelle recorded nearly 1.8 billion transactions in 2021, a total of $ 490 billion, doubling their pre-epidemic levels. The company’s growth has opened up new possibilities for Zelle but has sparked controversy among platform-owned banks, including JPMorgan Chase & Co., Bank of America Corp., and Wells Fargo. Tea Hall banks are arguing that it is in their best interest to promote a payment option that would directly compete with the card network Visa and MasterCard. Financial institutions collectively make billions of dollars from merchants’ fees when shoppers use credit and debit cards.
As Zelle becomes a new form of payment, banks will risk accessing funds directly into the bank accounts of buyers and merchants. The report states that Wells Fargo and Bank of America are in favor of expanding the service to retail payments, according to industry insiders familiar with the matter. Currently, executives at JPMorgan, America’s largest bank, are unsure if the timing is right for Zelle expansion. The company is urging more focus to protect consumers from fraud, insiders say. US Bancorp and Capital One Financial Corp. Also indecisive.
In order to use Zelle as a payment method, owners of Zelle must vote before activating the service across all banks using the platform. Seven banks are owned by Early Warning Services LLC, the company that operates Zelle, and about 1,450 financial institutions offer Zelle to their customers. The company has already added features that serve businesses and is “working with financial institutions to explore more opportunities,” said a spokesman for Early Warning Services.
Roommates, do you think Zelle should be used to pay for retailers?
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