Bank of America started using Zelle as a way to allow its customers to more easily make person-to-person fund transfers. It was a convenience its customers in the marketplace and in focus groups said they desired.
Bank of America officials, however, have been surprised by its rapid rate of use.
Since its introduction in 2016, the use of Zelle by Bank of America customers has grown every year. In fact, its use in 2019 topped its total use in 2018 in fewer than nine months, as the bank handled more than 160 million transactions through the end of August — and could break 200 million for the year.
Effie Gikas, senior vice president and consumer banking region executive in Central New Jersey, said the numbers are growing quickly because of Zelle’s ease of use — and the security behind it.
“The number of consumers turning to cashless solutions to move and manage their money is growing every day,” she said. “With Zelle, you can send and receive money with family and friends within minutes — and it happens without leaving the security of a financial institution. It’s very fast and it’s very safe.”
It’s also very free.
Bank of America does not charge its customers a fee to use Zelle. The only requirement is that both parties have registered to use the product through their bank and their cell phone.
“It’s about the customer relationship and providing them with convenience and ease when sending money,” Gikas said.
Zelle is used mainly to transfer money between friends and family (think splitting a restaurant bill, a rent or utility payment or a babysitter), but Gikas said it is starting to take root as a better (and cheaper) way to give a gift, rather than a traditional gift card.
“People are finding uses,” she said.
More than 200 banks are part of the Zelle system now, but Gikas said she’s proud of the fact that Bank of America was one of the first adopters of the system that was created by a company called Early Warning Services.
“We’re always committed to delivering innovative solutions to help our clients with convenient ways to bank,” she said. “We want our customers to be able to bank when and where and how they want.”
Capturing — and keeping — mobile customers is a top priority, Gikas said.
“We’re always again looking to innovate and evolve,” she said. “Zelle is one of those key enhancements that we are continuing to demonstrate that we want to lead in the digital space.”
Bank of America currently has 37 million digital customers and 28 million mobile users — numbers that grow every quarter, Gikas said.
“As I think about the volume of users that are currently using person-to-person payment of Zelle — we’ve got 8.4 million of our clients who are active in using Zelle right now — I think the sky is the limit on growth.”
One reason: Zelle is attracting users from all demographics, Gikas said.
While two-thirds of Bank of America’s Zelle users are either millennials or Generation Z (those roughly in high school and college now), Gikas said 20% are from Generation X and 12% are baby boomers and seniors.
How Bank of America evolves Zelle payments in the future remains to be seen.
“We don’t comment on future plans, but we’re always looking at a variety of different ways on how we’re going to serve our clients better,” Gikas said.
It’s how Bank of America came to adopt Zelle initially.
“We see how many people are banking on using their phone and how many people are making purchases using their phone,” she said. “We study behaviors, do focus groups and talk to our customers.
“Our customers said they wanted easier ways to make payments, so we looked to find the most effective way to deliver that product.”