Zelle, banks' Venmo alternative, prepares to make its debut

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Early Warning's clearXchange P-to-P system will become "Zelle" in 2017 and will be embedded in the online and mobile banking channels of its network banks.

A consumer app for mobile P-to-P payments will be also be released in 2017, the company announced Oct. 24

"The idea was to have a name that was a little more inspirational and approachable," said Paul Finch, CEO of Early Warning, adding the name derives from a gazelle, is meant to evoke speed, and is amenable to a verb—"Zelle me the money."

Similar to Venmo, clearXchange lets customers of member banks send money to each other by inputting either an email address or mobile phone number. JPMorgan Chase, Bank of America and Wells Fargo founded clearXchange, and hope to expand its services beyond P-to-P.

The name Zelle, which resulted from market research and will be accompanied by a marketing and ad campaign, will also be the brand behind the increasing array of use cases beyond P-to-P such as disbursements, government payments and insurance payments, Finch said.

ClearXchange has existed for several years, and was rolled into Early Warning—a risk management initiative owned by many of the same banks—to consolidate the two services in 2015.

It's attracting users. ClearXchange handled 46 million transactions in the first quarter, or about $16 billion. That's a lot more than Venmo's $3.2 billion. The rebrand has been rumored for several weeks, and should make the service more familiar to consumers and help make the app attractive to merchants, according to consultants.

"We suspect that more people will use it, and will use it more as they start to receive payments through Zelle," Finch said.

ClearXchange does not include the social tools that Venmo does—the PayPal app's users can send messages in a group and use emoji, and Finch said that type of feature is not planned for Zelle at this time.

The Zelle network covers an addressable market of 76 million mobile banking users and has been steadily expanding, recently getting a boost with the addition of Citigroup. The network currently includes Ally Bank, Bank of America, Bank of the West, BB&T, BECU, BNY Mellon, Capital One, Citi, FirstBank, Frost Bank, Fifth Third Bank, First Tennessee Bank, First Tech Federal Credit Union, JPMorgan Chase, PNC, Morgan Stanley, USAA, U.S. Bank and Wells Fargo.

Early Warning has also partnered with CO-OP Financial Services, FIS, Fiserv, Jack Henry, Mastercard and Visa to offer banks and credit unions multiple integration pathways onto the network as well as to increase the speed-to-market for new network members.

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Mobile wallets P-to-P payments U.S.