Zelle plans to air more 3,000 TV ads in the first quarter of 2018 featuring Hamilton star Daveed Diggs. Source: Zelle

Zelle — an in-app, person-to-person payments system backed by Bank of America, Wells Fargo and dozens of other major U.S. banks — is less than a year out from launch, but it has already rivaled industry leader PayPal in payment volume. Fewer than half of Zelle's 60-plus partner banks had launched the service as of late last month — according to a spokesperson — but the payment system still moved $75 billion in 2017, more than double the $35 billion PayPal's Venmo moved in the same period. Mobile payments are an increasingly important battleground for financial institutions as millennials continue to abandon cash and checks for digital payment methods. "The banks do have scale," KeyBanc analyst Josh Beck said. "They're probably in a good position to tackle this market."

It's not necessarily a winner-take-all market, according to several analysts, but it's one traditional banks are desperate to enter. And while Zelle finds its footing, its competitors get a boost from the broadening industry and rise of cashless banking. Banks want millennials opening accounts, and they're hoping popular services will keep them there. Millennials want easy and instant mobile payments, and have already proven they don't mind leaving the bank for them. Zelle acts as a bridge between big banks, processing mobile, 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.

"It's a battleground for them," Beck said. "In their heart of hearts, the banks are quite concerned about Venmo." PayPal's Venmo cornered the market early, with a clean interface, a level of widespread adoption necessary for end-to-end transactions and a social component that Zelle notably lacks. Venmo allows users to attach subject lines, emojis and comments to a transaction, which then populate a single feed (minus the dollar amount). Money changes hands, friends laugh about funny memo lines and a broader network gets a glimpse at your enviable weekend plans. "It's not just a conversation about money. It's really a conversation about the experience you had," PayPal COO Bill Ready told CNBC. "It's not about just splitting the tab. It's about who had one glass of wine too many."