Varo will offer the peer-to-peer payment network Zelle as part of its mobile app, the digital bank announced Tuesday (Nov. 15).
With this launch, Varo says it has become the first all-digital bank to offer Zelle in its app without needing a partnership with a bank.
“The addition of Zelle opens the door to the 90 million people in the U.S. who are driving the growth of digital banking, including those with limited or inconsistent access to traditional financial institutions,” the company said in a news release.
As PYMNTS noted earlier this year, Varo was the first consumer FinTech granted a national bank charter from the U.S. government and has used the time since then to launch several offerings that let account holders get early access to their paychecks, apply for installment loans and open free checking and savings accounts.
“Adding Zelle to our product lineup is our bank charter in action,” Colin Walsh, Varo’s founder and CEO, said in the news release.
Launched five years ago, Zelle reached a milestone in September when it announced it had processed 5 billion transactions totaling $1.5 trillion since its launch.
Based in Scottsdale, Arizona, Zelle was founded by Early Warning Services, LLC, a private financial services company owned by a consortium of seven of America’s largest banks.
“Zelle has transformed the way more than a hundred million people move money and conduct digital transactions. We are part of consumers’ everyday lives and committed to being their trusted source for digital payments that are easy to use and don’t require the sharing of any bank account information,” Early Warning CEO Al Ko said in September.
Recent research by PYMNTS has found that 39% of consumers use FinTechs as their primary or secondary financial institution (FI).
This suggests that at least 68 million Americans use FinTechs to some extent, often to receive or send money in a peer-to-peer (P2P) fashion.
However, our study found that “FinTechs are especially popular among low-income consumers who live paycheck to paycheck with issues paying bills,” with 39% of consumers in that cohort using FinTechs and 22% using them as their primary FI.