Just when it may seem banks have lost the ground in P2P payments to Venmo and PayPal, financial institutions proved to be perfectly capable of scalable innovation. Last October, Zelle processed $1.5 billion worth of payments – up 90% from the same month the previous year. In an even more impressive achievement, the yet half-legged Zelle (fewer than half of Zelle’s 60+ partner banks had launched the service as of late January 2018) moved $75 billion in 2017, which is more than twice the money its popular rival Venmo moved in the same period.
It took Venmo nine years to get to that volume (the service was launched in 2009), but Zelle, an aggressive institutional “child,” beat all expectations in a fraction of the time.
Pick #1. A Mobile Payments App From US Banks Is Less Than a Year Old, but Rivals Venmo’s Volume
According to a spokesperson, fewer than half of Zelle’s 60-plus partner banks had launched the service as of late last month but the payment system still moved $75 billion in 2017, more than double the $35 billion PayPal’s Venmo moved in the same period.
Zelle acts as a bridge between big banks, processing mobile and person-to-person payments – much like Venmo or Square’s Cash app. But Zelle works faster and is aimed at keeping coveted millennial banking customers in-house.
The adoption challenge for Zelle is a unique one. Banks don’t have to educate users on the functionality of Zelle or convince them to download the service. Instead, they have to inform users they already have Zelle on their phones, in their banking apps.
Pick #2. Google Starts Taking Payments for Apps via Kenya’s M-Pesa Service
Google Play apps and games store has started accepting payments in Kenya through Safaricom’s mobile phone M-Pesa service to boost downloads in a market where many people do not have a credit card.
Safaricom has 13 million smartphones on its network, most of them using the Android platform. It partnered with London-based global payments platform provider, DOCOMO Digital, to enable users to pay through M-Pesa.
Pick #3. Robinhood Rolls Out Zero-Fee Crypto Trading As It Hits 4M Users
Robinhood starts rolling out its no-commission cryptocurrency trading feature in California, Massachusetts, Missouri, Montana and New Hampshire. Users there can buy and sell Bitcoin & Ethereum with no extra fees, and everyone can track those and 14 other coins in its sleek app. That’s compared to paying 1.5 to 4% fees in the US on Coinbase. Users can sign up on the Robinhood Crypto site to waitlist for access.
“Together, we reached four million users and well over $100 billion in transaction volume on our brokerage platform, leading to over $1 billion in commissions saved in equity trades. With the release of Robinhood Crypto, we’re continuing our mission of making the financial system work for everyone, not just the wealthy.” – Robinhood blog
On most stock trading services, customers pay ~$7 per trade to cover these companies’ marketing, physical branches, and sales reps. Founded in 2013, Robinhood ditches those fees by running a lean operation centered around engineers and its app. It makes money on the interest of cash its customers keep with it, or by selling monthly Robinhood Gold subscriptions that let users borrow money to trade with.
Pick #4. Paytm to Launch Its Own Credit Scoring Product ‘Paytm Score’
Paytm is launching a credit scoring product, Paytm Score, on its platform, based on customer transactions and behavior.
Paytm Score will factor in the customer transactions across the company’s multiple offerings, including wallet, e-commerce, bookings platforms, and will throw up a final score that it is likely to be shared with the company’s lending partners, said one of the persons, who did not wish to be identified.
“Data is the new oil, but credit is the driver of scale in commerce. By leveraging its customer data to provide a credit scoring service, Paytm is taking a big step in becoming a credit marketplace – and it should make the service more attractive to users and partners,” said Sanjay Swamy, Managing Partner at Prime Venture Partners.
“In a country like India which was data poor, digital transactions of all kinds will be a key enabler, and this is what companies can eventually monetize,” he said.