Most financial institutions (FIs) know person-to-person (P2P) payments have become table stakes. Consumers want to tap, swipe or one-click when they shop, search and bank.
According to a recent Aite Group Study, 85% of U.S. consumers who used P2P services to receive payments in the past 12 months reported it is “important” or “extremely important” to receive payments in real-time.
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Members are demanding real-time payment services. And it is not just generation Z or millennials who expect fast, safe, and easy payments.
Early Warning’s 2019 Digital Payments Adoption Study found that 50% of first-time P2P users are age 45 or older. The great news is they want to use P2P because it is offered by their FI.
Seventy-six percent of generation X and 74% of baby boomers surveyed ranked “offered through a financial institution they use” as a top reason to try P2P payments.
Let that sink in. Consumers are using digital payments because they trust their FIs.
Zelle is one of the fastest-growing solutions available. Millions of consumers are sending and receiving money with Zelle.
In Q1 2019, consumers sent $39 billion through the Zelle Network® on 147 million transactions.
The beauty of Zelle is that the more access people have to it, the more they will become educated about how to use it. Customers of about 5,400 FIs are using the Zelle Network, whether it’s through their FI’s mobile banking app or by registering their debit cards in the Zelle mobile app.
Credit unions of all sizes are participating in the Zelle Network. Participants range from those with $47MM in assets to billions.
But launching any new payment type is going to come with benefits and challenges. Technology is changing the way people bank, and to keep up with the pace of change, FIs and processors are enhancing their systems.
Sometimes that requires work, and sometimes a processor has already made the enhancements and an FI just needs to take advantage of them. Either way, it’s important to start the conversation and learn what needs to be done to modernize systems.
Many FIs are joining Zelle through key reseller partners. Early Warning, the operator behind Zelle, has added additional tech companies to work with FIs to ease implementation complexity and help with onboarding times.
Early Warning has also invested in its systems to streamline the integration process, and recently onboarded dozens of FIs at once.
Resellers provide turn-key solutions covering the four key components of Zelle enablement:
Real-time messaging.
Real-time fraud monitoring.
Digital enablement.
Data contribution.
They also address settlement, which takes a burden off operations teams.
In return, FIs receive a myriad of benefits—fewer checks to manage and less cash in the system for starters.
Credit unions should weigh the cost in relation to retaining and growing your member base, enhancing engagement and cross sell-opportunities, and the brand affinity generated because members stay in the credit union environment instead of going elsewhere.
Then, there is the added benefit of providing a service customers want in a fast, safe, and easy way.
Zelle was truly built for financial services companies of all sizes to modernize its faster payments capabilities, enhance their brands, and keep up with consumer demand.
Credit Union Magazine’s Spring 2023 issue features the 2023 Credit Union Heroes and examines CUNA-League advocacy priorities, board leadership, the impact of financial well-being efforts, fee-related compliance issues, predictions for the year ahead, and more.
