You know you have a killer app if banks need to build an alliance to take you down.
Citigroup Inc. is set to join its fellow big banks in building a peer-to-peer payments app in the hope fending off fintech upstarts like Venmo.
To do so, Citigroup will become a member of clearXchange, a real-time money movement network that includes Wells Fargo & Co., J.P. Morgan Chase & Co., Bank of America Corp., U.S. Bancorp and others, the bank said.
The Wall Street Journal continues that the group is developing an app called “Zelle,” a “Zenmo-killer” which is expected to roll out in 2017. How do they plan to destroy their Paypal-backed nemesis? By being faster than everyone else.
While its competitors require a day or two to make transfers available for withdrawal, Zelle transfers — theoretically — will be available instantaneously. All you need to do is a click a few buttons and voila! It’s in your bank account, even if the actual funds haven’t been formally settled on the back end.
While it’s a bit worrying that banks need to skip a step to gain an edge (to compensate, they agreed to back each other’s transfers), it isn’t too much of a stretch to think that Zelle could take some market share from Zenmo here. I’m not entirely sure about its chances as a verb though:
U.S. banks want their customers to “zelle” each other.
Photo: Matt Buck