Banking Industry’s Zelle Seen Outgrowing Square Cash, PayPal’s Venmo

Zelle, a person-to-person mobile payment service launched by 30 U.S. banks, is poised to grow faster than competing apps from Square (SQ) and PayPal Holdings (PYPL), says a market researcher.


Zelle’s backers include JP Morgan (JPM), Bank of America (BAC), Wells Fargo (WFC), U.S. Bancorp (USB), and Capital One Financial (COF).

The banks launched Zelle last year, taking on PayPal’s Venmo app, Square Cash and Apple (AAPL).

Research firm eMarketer estimates that Zelle will end 2018 with 27.4 million users, up from 15.8 million last year. PayPal’s Venmo will have 22.9 million users vs. 17.3 million a year earlier, says eMarketer.

Square Cash will have 9.5 million users, up from 6.9 million, it says. EMarketer does not have a forecast for Apple’s P2P app.

Zelle lead to grow by 2022

By 2022, eMarketer estimates that Zelle will have 56.1 million users vs. 38.7 million for Venmo and 16.2 million for Square Cash.

While the money-transfer services are mostly free for consumers, PayPal and Square aims to get fees from merchants that accept the money transfers as payment.

Shares in JP Morgan, Bank of America, Wells Fargo, U.S. Bancorp, and Capital One all edged down fractionally on the stock market today.

Square dipped 1.1% to close at 62.50 while PayPal gained 0.3% to 85.27. Square has surged 159% from a year ago. PayPal has popped 64%.

PayPal stock has been consolidating is trading just below a technical buy point of 86.42. Square’s chart has formed a cup-with-handle pattern.


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