Bank of America shows you don’t have to be cool to win in peer-to-peer payments

In peer-to-peer payments, there may be room for more than one winner.

PayPal Holdings Inc.’s PYPL, +0.69%  Venmo was once synonymous with the act of sending money digitally to a friend, replete with emoji annotations and a news feed of all your friends’ transfers. Now the big banks are now showing that you don’t have to be young and cool to be successful.

Bank of America Corp. BAC, +0.44%  said in conjunction with its first-quarter earnings report Monday that it processed 29 million peer-to-peer payments during the quarter through Zelle, a joint platform that many big banks use to let customers send and receive money from friends who belong to any participating bank. That marked 130% growth from a year earlier and represented $9 billion in volume.

Of course, that’s still a fraction of the peer-to-peer volume that PayPal sees across its platforms. The company grew peer-to-peer volume by 50%, to $27 billion, during the holiday quarter, which is the last period for which it has reported results.

By introducing their own peer-to-peer option, the big banks aren’t necessarily out to destroy PayPal and Venmo. During Bank of America’s conference call Monday, Chied Executive Brian Moynihan cited Zelle in response to a question on how the company’s digital initiatives were helping to cut costs.

Zelle and peer-to-peer payments are “getting more meaningful,” he said, and are just one way the company is working to displace cash and checks, which are costly for banks to process and handle. Things are “not going to be immediately changed,” he contended, but Bank of America is taking some steps in the right direction.

Younger consumers are more likely to have tried peer-to-peer payments, with 42% of adults aged 18 to 24 having done so, according to a recent survey by payment processor Total System Services Inc. TSS, +1.36% , compared to 29% of the general population. Zelle makes peer-to-peer payments more accessible to an older crowd who don’t mind a bare-bones experience.

Apple Inc. AAPL, +0.62% too, is helping in this regard. Its Apple Pay Cash feature, launched a few months back, lets iPhone users send money to their friends from within the iMessage app. To help that process along, Apple highlights monetary amounts in people’s messages and encourages users to send their friends that amount of money. Apple doesn’t disclose volume statistics for the feature and didn’t immediately respond to MarketWatch’s request for more information.

Square Inc. SQ, -0.99%  has also been highlighting its peer-to-peer service. Like PayPal, the company is looking for ways to monetize its service, including with an associated debit card, instant transfers and the ability to buy and sell bitcoin BTCUSD, -3.69%  in-app. Square didn’t release volume statistics either in its latest quarter, though it did say that its Cash peer-to-peer app had more than 7 million monthly active customers in December.

The various peer-to-peer offerings serve different types of users, and it’s likely that winning in this space won’t be a zero-sum game, especially when Americans are spending trillions of dollars in cash each year.

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