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Article from www.letstalkpayments.com
Since its founding in 2009, Venmo has established itself as one of the premier peer-to-peer money transfer servicesand one of the most prominent names in FinTech. From its humble beginnings as the brainchild of former college roommates, the app was the first to enable quick and easy money transfer between friends and last year processed $17.6 billion worth of payments, a 135% increase from the previous year. In 2016, Time magazine named it one of thebest apps of the year, and in 2017, Fortune magazine named it one of its breakthrough brands. It has, without a doubt, changed the landscape of P2P payments by taking advantage of the inefficiencies of exchanging money with friends via traditional methods offered by the big banks.
Now, however, the big banks have answered; beginning this month, Zelle will enable more than 86-million US mobile banking consumers to easily send and receive money through the app. While this could spell the beginning of the end for Venmo, it could also show that the big banks are doing too little too late in the P2P money transfer field and that Venmo is already too established in its customer base for users to bother switching to something new.
However, no matter which service ultimately comes out on top, this has shown that FinTech firms have the power to force the hand of big banks towards crafting consumer-friendly innovation that may have otherwise been ignored. In order to understand the full scope of this development, we must first understand what enabled Venmo’s popularity and what Zelle is bringing to the table to compete with it.