Zelle is Quickly Catching Up to Venmo
- September 19, 2018
- Posted by: Mike Brown
- Category: Study
"Just Google it."
"Are we going to Uber there?"
"Can you Venmo me?"
Sometimes a company and it's product becomes so mainstream, it becomes an actionable verb. And, when it comes to peer-to-peer (P2P) payment applications, Venmo has taken the clear lead.
However, a new LendEDU survey revealed that Zelle is not far behind Venmo, and the competition for top-dog in the P2P industry is heating up more quickly than most expected.
Zellle is a P2P payment application backed and launched by the major banks that allows for users to transfer money to one another even if they use different financial institutions. Zelle's main selling points include security and the instantaneous depositing of funds into bank accounts.
Launched in June, Zelle got off to a slow start; a LendEDU survey in July found that 94 percent of respondents had never heard of Zelle, and only 36 percent would ever give it a try in place of Venmo.
Now almost nine months later, LendEDU's most recent Zelle-based study found that the payment app is making up some serious ground. Our poll revealed the following key findings:
- 42.6 percent of respondents have heard of Venmo while 29.1 percent have heard of Zelle; 23.45 percent of those respondents have used Zelle and 29.64 percent have used Venmo.
- 29.69 percent of respondents that have either never heard of Zelle, only use Venmo, or use both Venmo and Zelle, would consider using Zelle as their primary P2P payment app after being told what it is. 35.05 percent were unsure.
- 22.41 percent of respondents that have used both Venmo and Zelle have been more satisfied with Zelle, while 20.69 percent have liked Venmo better. 50 percent had an equal level of satisfaction.
Full Survey Results
Note: The following survey was administered at random to 1,000 adult Americans from the general population.
1. Have you ever heard of Zelle or Venmo? (Select all that apply)
a. 29.1 percent of respondents answered "Zelle"
b. 42.6 percent of respondents answered "Venmo"
c. 46.7 percent of respondents answered "None of the above"
2. (Asked only to those who answered A or B to Q1) Have you ever used Zelle or Venmo as a peer-to-peer payment application?
a. 12.57 percent of respondents answered "Yes, Zelle only"
b. 18.76 percent of respondents answered "Yes, Venmo only"
c. 10.88 percent of respondents answered "Yes, both"
d. 57.79 percent of respondents answered "No"
3. (Asked only to those who answered A or C to Q2) In your estimation, what is your average payment size (received or sent) when using Zelle (in dollars)?
a. 19.2 percent of respondents answered "Between $1 and $30"
b. 37.6 percent of respondents answered "Between $31 and $75"
c. 32 percent of respondents answered "Between $76 and $200"
d. 11.2 percent of respondents answered "Over $200"
e. The average answer amongst respondents was $89.58
4. (Asked only to those who answered B or C to Q2) In your estimation, what is your average payment size (received or sent) when using Venmo (in dollars)?
a. 25.32 percent of respondents answered "Between $1 and $30"
b. 44.94 percent of respondents answered "Between $31 and $75"
c. 20.89 percent of respondents answered "Between $76 and $200"
d. 8.86 percent of respondents answered "Over $200"
e. The average answer amongst respondents was $74.37
5. (Asked only to those who answer either C to Q1 or B, C, or D to Q2) Zelle is a peer-to-peer payment application backed and launched by the major banks. It sells itself as being more secure and by depositing any transferred money into your bank account immediately. Would you consider using Zelle as your primary peer-to-peer payment application?
a. 29.69 percent of respondents answered "Yes, I would definitely consider doing this."
b. 2.89 percent of respondents answered "Yes, I already have started using Zelle as my primary peer-to-peer payment application."
c. 3.32 percent of respondents answered "Yes, other"
d. 29.05 percent of respondents answered "No"
e. 35.05 percent of respondents answered "Unsure"
6. (Asked only to those who answered C to Q2) Acting as a peer-to-peer payment application, have you been more satisfied with Venmo or Zelle?
a. 20.69 percent of respondents answered "Venmo"
b. 22.41 percent of respondents answered "Zelle"
c. 50 percent of respondents answered "About the same"
d. 6.9 percent of respondents answered "Unsure"
7. (Asked only to those who answered B to Q6) Why have you been more satisfied with Zelle? (Select all that apply)
a. 61.54 percent of respondents answered "I feel more secure using Zelle because it was backed and launched by the major banks."
b. 53.85 percent of respondents answered "I like how money transferred through Zelle is in my bank account immediately."
c. 53.85 percent of respondents answered "I like how there is no social aspect of Zelle, which keeps my financial transactions private."
d. 0 percent of respondents answered "Another reason not listed"
e. 0 percent of respondents answered "Unsure"
8. (Asked only to those who answered A to Q6) Why have you been more satisfied with Venmo? (Select all that apply)
a. 25 percent of respondents answered "There is just no reason appealing enough to warrant switching to Zelle."
b. 66.67 percent of respondents answered "I like the social aspect of Venmo."
c. 58.33 percent of respondents answered "I enjoy having a Venmo balance that I can use without taking more money out of my bank account."
d. 33.33 percent of respondents answered "I feel secure using Venmo and trust the application."
e. 0 percent of respondents answered "Another reason not listed"
f. 0 percent of respondents answered "Unsure"
Observations & Analysis
Zelle Has Made Up Ground on Venmo
When we first ran a Venmo-Zelle comparison survey back in July of 2017, the methodology was a bit different; instead of surveying 1,000 Americans from the general population, we only surveyed 500 Venmo users.
With that being said, there is a noticeable difference in the notoriety and usage of Zelle from that poll to this one.
In this poll, 29.1 percent of respondents had heard of Zelle, while 42.6 percent had heard of Venmo, and 46.7 percent had not heard of either (respondents were allowed to answer Zelle and Venmo if applicable).
In our original Zelle-Venmo survey, only 6.1 percent of respondents had ever heard of Zelle, indicating that the peer-to-peer payment application backed by the major banks has made significant strides.
That was not the only similar question from the earlier survey to this one that signified Zelle is taking major strides towards challenging Venmo's supremacy atop the peer-to-peer payment throne.
In the July of 2017 survey, we uncovered that only 36.58 percent of poll participants would be willing to switch from Venmo to Zelle, while 63.42 percent were not willing to convert from Venmo to Zelle.
The results were a bit different in 2018...
As the above visual displays, only 29.05 percent of survey takers were completely unwilling to consider switching off Venmo and onto Zelle. Meanwhile, 29.69 percent were eager to give Zelle a try, 2.89 percent already have started using Zelle as their go-to P2P payment app, and 35.05 percent were unsure.
It is also worth noting that, according to question two of this survey, 12.57 percent of poll participants are only using Zelle, as opposed to 18.76 percent that are only using Venmo. An additional 10.88 percent are playing to both sides by using both peer-to-peer payment systems.
Taken collectively, the results of these three questions make it hard to dispute that Zelle has made noteworthy headway in the peer-to-peer payment space. Venmo is still the clear king, but that gap has shrunk significantly in the course of roughly nine months.
For Users of Both Venmo & Zelle, Satisfaction Near the Same
As the aforementioned questions seemed to hint, Zelle is making headway on Venmo. However, that headway will all be for naught if Zelle is unable to keep users happy and coming back to use the app instead of going right back to Venmo, a proven commodity.
One question from this poll revealed that Zelle may have no trouble in accomplishing that key to success.
For users of both Venmo and Zelle, of which there were 58, 22.41 percent of them were more satisfied with Zelle, while 20.69 percent were happier with Venmo. The plurality of respondents, 50 percent, indicated that they were equally content with both P2P applications, while 6.9 percent were undecided.
An enjoyable consumer experience is the key for any young business, or in this case, app. Not only will the satisfied users keep coming back, but they will likely spread the word of their approval, which should bring in even more people. Albeit a small sample size of respondents that have used both Venmo and Zelle, it appears that Zelle is on the proper trajectory in terms of delivering a satisfactory experience.
For Zelle, Security Drives Satisfaction, While Social Aspect is Key for Venmo
Since the beginning, Zelle has been playing catchup with Venmo. So, how does an app like Zelle make up ground and convert users over from Venmo, a quality app that has kept consumers from needing to look elsewhere?
One of Zelle's main selling points is the idea that it is more secure than Venmo because it is backed and was launched by the major banking institutions, whereas Venmo is a third-party app. Our survey data shows that pitch may very well be working.
Respondents that were more satisfied with Zelle cited the application making them "feel more secure" as the main reason for that happiness. Immediate bank account transfers and the lack of a social feed were also prominent reasons as to why some consumers prefer Zelle. It is worth noting that poll participants could select all answer choices that applied to them.
Conversely, whereas some Zelle users cited the lack of a social feed as a reason why the prefer Zelle, Venmo's social aspect was the P2P's app most prominent feature for user satisfaction.
Venmo's social feed has long been a selling point for today's consumers, especially younger ones. It gives users another outlet to view what their friends are doing, who they are hanging out with, and where they are.
Alexander Lowry, a Professor of Finance at Gordon College, highlighted the attraction towards Venmo social feed quite well: "Young people love Venmo because it lets them scope the transactions of everyone in their social circle. Payments have become a sharing experience on Venmo because they are tied to your social network. Venmo users open the app four or five times a week. But they only do transactions a couple of times a week. So they’re opening it to review the feed to see what their friends bought."
Furthermore, Venmo users also liked that they could keep their money in their accounts. This was the second most popular reason in terms of why they were satisfied with the application.
It was interesting to find that the lack of a social feed and the immediate transfer of funds into one's bank account were two of Zelle's sticking points, but the opposites of those two reasons (social feed and holding onto a Venmo balance) were also two of Venmo's biggest attributes. This could mean that the two P2P payment competitors are going after two different types of consumers, in which case there would be opportunity for everyone.
Average Payment Sizes Are Bigger on Zelle
We thought it would be interesting to compare the average amount of money that is being transferred through both Zelle and Venmo. As it turns out, the difference in average payment size on each app is quite narrow, but Zelle payments are slightly bigger.
The survey data revealed that the average payment size on Zelle was $89.58, while Venmo's average payment size was $74.37.
While the difference in average payment size between the two is small, there could be one reason for the trend. Zelle, since it is backed and launched by the major banks, could be thought of as the more secure P2P payment application when compared to Venmo. For this reason, consumers, especially older ones, could be more inclined to send their larger amounts of money through Zelle instead of Venmo.
All of the data found within this report derives from an online poll commissioned by LendEDU and conducted online by online polling company OnePoll. This particular survey was conducted over a five day span, starting on April 19, 2018, and ending on April 23, 2018. 1,000 members of the general U.S. population were surveyed and selected for this particular poll at random from OnePoll's user panel. All respondents were asked to answer each question truthfully and to the best of their abilities.