Bank-led innovation: The expansion of the Zelle network in the US — key drivers, market impact and future outlook

Abstract

The Zelle network has experienced considerable growth in the USA since its launch in 2017, reshaping peer-to-peer (P2P) payments through its direct integration with financial institutions. This paper reviews Zelle’s expansion strategies, market adoption drivers and the implications of its rapid rise for banks, regulators and consumers. Drawing on industry data from 2017 to mid-2024, the analysis situates Zelle within an evolving ecosystem that also includes competing P2P platforms such as Cash App and Venmo. The data show that Zelle’s bank-backed model has propelled its user base to over 140 million, with year-over-year increases exceeding 25 per cent in both transaction numbers and value. Strategic partnerships with more than 2,200 institutions, coupled with a focus on security and brand trust, have helped Zelle gain traction among demographics traditionally more cautious about digital payments. Nevertheless, fraud challenges and regulatory scrutiny have prompted new risk mitigation measures, including enhanced transaction monitoring and partial reimbursement policies for scam victims. The findings suggest that the alignment of Zelle’s product design with existing banking apps — emphasising simplicity, consumer trust and near-instant transfers — has accelerated its adoption across diverse consumer segments. By examining the underlying drivers of Zelle’s success and contrasting it with other major players, the paper offers recommendations for financial institutions, regulators and industry stakeholders on the opportunities and risks tied to bank-based P2P payment platforms. In conclusion, Zelle’s experience underscores the importance of collaboration, innovation and proactive risk management in shaping the future of real-time digital payments in the USA. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.