If you’re not a millennial, it’s quite possible you’ve never heard of Venmo, but this peer-to-peer (P2P) money transfer service certainly has its advantages over more traditional means of transferring money between individuals, such as bank transfers or even PayPal payments. From a pure functionality perspective, what immediately set Venmo apart from other legacy online payment services such as PayPal was its ability to transfer money between Venmo accounts instantaneously, regardless of your banking affiliation. This suddenly changed the game for bill splitting or paying someone back. Additionally, Venmo plays into the social media mindset, as it allows users who are connected to see who has paid whom for what and how recently. And while you might think that sounds like oversharing and possibly even a little narcissistic, for millennials that’s a way of life and like big banks (and others) have come to realize, you can’t thrive in today’s economy without considering the millennial perspective.
So, it isn’t really all that surprising that big banks, many of whom are already struggling to attract millennial clients, have now gotten in on the on-demand P2P game with the creation of the new app, Zelle. What may surprise some is that this venture is a combined effort of nineteen of the nation’s largest banks, including Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. That’s right – these competitors teamed up to try and beat Venmo at its own game, and it just might work.
If you’re skeptical and wondering why anyone, especially a millennial, would ever switch from using Venmo to using Zelle when they pride themselves on supporting hip startups and pushing back against corporations like the big banks, here’s the key. Banks still have one advantage, they hold your actual money. And although Venmo can instantly transfer money between Venmo accounts, there still is a lag when it comes time to cash out, as you wait for the money to appear in your bank account. With Zelle, the actual money transfer from one bank account to another becomes instantaneous, meaning there’s no delay when you want to cash out.
Bank of America was recently the first to roll out the Zelle network as part of their customer app and other banks should soon follow suit, so the question really becomes is this too little too late – or has corporate America just found their way into the hearts and minds of millennials. Only time will tell.