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Peer-to-peer payments network Zelle is growing transaction volume, according to numbers released Tuesday by its bank-owned network operator, Early Warning Services.

According to Early Warning data, Zelle users sent $49 billion through the network during the third quarter of 2019, a 58% year-over-year increase. Meanwhile, users made 196 million transactions during the quarter, representing 73% year-over-year growth.

Despite this impressive jump, Gina Bhawalkar, principal analyst at Forrester Research, noted that banks still struggle with Zelle’s user experience. In particular, the lack of a common interface across banks is a source of friction for some users.

“We’re seeing a lot of banks struggling to position Zelle in the right way,” Bhawalkar said. She added in some instances, Zelle can be difficult to find, and its capabilities aren’t always explained clearly to customers by institutions.

See also: BofA sees encouraging results among small businesses using Zelle

In addition to the transaction numbers and payment volume, Early Warning announced 254 financial institutions are now processing Zelle transactions, up from 179 last quarter. Including institutions that are in the process of onboarding Zelle, more than 600 financial institutions will soon start using the network.



“By connecting financial institutions of all sizes, we have enabled consumers to send fast payments to friends and family,” said Lou Anne Alexander, group president of payment solutions at Early Warning, in a statement. “Thanks to our partners, we are changing the way money moves today and influencing how it moves.”



While Early Warning is seeking to increase Zelle’s footrprint, the cost to get on the network is still a hurdle for smaller institutions. Talie Baker, a senior analyst at Aite Group, said many community banks and credit unions find the service expensive. Reinforcing Zelle’s value to customers should be central to its expansion plans, she explained.

“I don’t think [Zelle’s] value proposition has sunk in yet, and a lot of people use Venmo for its ease and convenience,” she said. “With a little more time, I think Zelle will get there. It is truly a brand new service after all — just two years old — and we need to allow time to work out the kinks.”

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