In the past five years, consumers and businesses, small and large, have sent more than five billion Zelle payments, “totaling nearly $1.5 trillion,” according to Early Warning Services, LLC, the network operator of Zelle.
Zelle users have “leveraged the convenience and security of Zelle to gift money, pay rent, reimburse friends and family for shared costs, receive reimbursements, or access money in critical moments, usually within minutes using Zelle.”
Sean Loosli, Head of Consumer and Small Business Payments for Zelle, recently shared his views and insights with Crowdfund Insider.
Our discussion with Sean Loosli is shared below.
Crowdfund Insider: It’s been five years since Zelle launched in 2017. What is the significance of the five-year milestone and what have you achieved?
Sean Loosli: People depend on Zelle to get money quickly for life’s many moments. For more than a hundred million consumers, Zelle is enabling them to pay their rent on time, get money quickly when in need (which has been critical throughout the pandemic), and have peace of mind that their repayment to a friend is complete within minutes.
Consumers and businesses have sent more than five billion Zelle payments in the past five years, totaling nearly $1.5 trillion. Nearly 1,700 banks and credit unions, including 100+ minority depository institutions, now offer Zelle in their apps. And according to Aite-Novarica, Zelle reaches 97% of DDAs in the U.S.
The adoption of digital payments across all generations, especially during the pandemic, is evidence that this trend is here to stay. Consumers are now accustomed to the ease of digital payments without the hassle of going to the ATM or waiting for settlement.
Crowdfund Insider: How has Zelle evolved to be more than just a P2P solution?
Sean Loosli: Zelle has transformed how people send and receive money by offering a fast and safe alternative to cash and checks. While Zelle started as a peer-to-peer option, it has become a valuable tool for Fortune 500 companies, educational institutions, nonprofits, and small businesses.
I’ve had several conversations with small business owners to learn about their experience with Zelle. Many have stated that they prefer Zelle because of how quickly the money goes into their account, and they feel safer using Zelle than other third-party digital payment services. Some also shared that with Zelle, the money feels more real going directly into their bank account versus competing services where money is held in a fund. Today, we estimate that 4.4 million small businesses are enrolled with Zelle.
Disbursements from larger companies and organizations have increased 87% quarter-over-quarter, further fueling the growth of the Zelle Network and enabling people to get money fast in their time of need. For example, our work with the American Red Cross includes disbursing funds to victims of wildfires, hurricanes, and other natural disasters. In addition, a non-profit organization called Wounded Warriors disbursed funds to needy veterans with Zelle.
Crowdfund Insider: What is your growth strategy to bring smaller financial institutions on to the Zelle Network?
Sean Loosli: We strive to give all Americans with a bank account in the U.S. access to digital payments. Today, nearly 1,700 banks and credit unions, including 100+ minority depository institutions (MDIs), offer Zelle in their banking app. An average of 60+ new banks and credit unions sign up each month. Smaller institutions, including credit unions and banks with under $10 billion in assets, now represent over 90% of Zelle participants. Financial institutions with less than $500 million in assets represent a quarter of all participants.
In addition, throughout the past year, we have worked with our resellers on rebate programs for qualifying MDIs that sign up to offer Zelle. MDIs play a crucial role for minority and underserved communities, including consumers and small businesses. We hope to make it even easier for these financial institutions to access the Zelle Network, giving their customers equitable access to financial services with additional tools to help meet their financial goals.
Crowdfund Insider: Scammers have gotten more sophisticated in their tactics. What is Zelle doing to prevent fraud and scams?
Sean Loosli: With technological advancements, scammers are finding new and clever ways to dupe people into giving them their money. We are committed to preventing fraud and scams, in partnership with our financial institution participants, by ensuring that all transactions are safe and secure. More than 99.9% of payments sent via Zelle are without any report of fraud or scams, but we won’t be satisfied until that number is 100%.
We take a three-pronged proactive approach to fighting fraud and scams on the network:
We prioritize consumer education. We have invested millions into educating consumers, by partnering with our bank partners, nonprofits, consumer safety organizations, influencers, and enterprises.
We include in-product messaging to ensure that senders take extra care before completing a transaction. Real-time safety notifications and education about common scams are included in the transaction flow while reminding users to use Zelle when sending money to people they know and trust.
A lot of work happens behind the scenes, in partnership with the banks, to screen and authenticate customer identities, monitor payment activity for risk factors, and identify and remove bad actors from the network.
Crowdfund Insider: How have you been educating consumers to protect themselves from these scams?
Sean Loosli: Arming consumers and small business owners with the information they need to detect and avoid bad actors and make informed decisions is one of the best defenses against fraud and scams. First and foremost, we work with our partner financial institutions to proactively educate our customers across multiple channels. In addition to working with our banks and credit unions, we have partnered with various organizations, influencers, and enterprises to educate consumers on how to fight fraud and scams.
For example, Zelle teamed up with leading social change organization EVERFI to offer free digital financial education courses for high school students across the country. The course prepares high school students to bank responsibly in the digital age and protects them from fraud and scams.
In addition, we have been working with Nev Schulman, host and executive producer of MTV’s “Catfish,” since November 2021 to create a PSA video series on social media focused on trending scams and how to avoid them.
Finally, we launched the Zelle Financial Education Center on our website to give consumers a resource for learning how digital banking works, how to avoid fraud and scams and how to make safe digital payments.
These are just a few ways we prioritize consumer education, and we will continue to be vigilant in our efforts to fight fraud and scams proactively.
Crowdfund Insider: What can we expect to see next from Zelle?
Sean Loosli: While we have seen massive growth on the Zelle Network in these first five years, I truly believe we are still in the early stages of reaching our full potential. We are focused on expanding our use cases with small businesses and disbursements. We continue to innovate to be at the center of businesses’ and consumers’ financial lives, and we are helping banks and credit unions build engagement with their customers.
In addition, the safety of the Zelle Network remains our top priority. We must constantly update and adapt consumer protection measures to stay ahead of the latest scammer and fraudster tactics.
Today, nearly 1700 banks and credit unions offer Zelle in their apps. We strive for true ubiquity and giving all Americans access to digital payments.