Sources: banks including JPMorgan, Bank of America, and Wells Fargo are considering whether to use Zelle as a payment option to compete with Visa and Mastercard
Context & Ripple Effects
Zelle was built in 2016-17 as a bank consortium answer to PayPal, Venmo, and Square Cash — a person-to-person rail embedded in member banks' apps rather than a standalone network (19 banks signing on to Zelle, then its launch inside participating banking apps). The move now under consideration extends that logic from P2P transfers into merchant payments, putting the banks' own rail in direct competition with Visa and Mastercard's card networks.
The timing matters on both sides of the ledger: the DOJ is probing whether Visa used financial incentives to keep Square, Stripe, and PayPal off rival networks (DOJ investigation into Visa's exclusivity incentives), while the same bank group behind Zelle has since moved toward a shared digital wallet run by Early Warning Services (the seven-bank digital wallet project) and, more recently, toward exploring a joint stablecoin (the banks' stablecoin exploration) — a steady escalation of bank-owned payment infrastructure.
First-order effects
- JPMorgan, Bank of America, and Wells Fargo would gain a card-free checkout option for their customers, routing purchases over Early Warning Services' Zelle rail instead of paying interchange into the Visa/Mastercard networks they currently depend on.
Second-order effects
- Visa and Mastercard face pressure on domestic debit and low-ticket volume — the segments where an instant bank-account rail substitutes most cleanly for a card — likely forcing pricing or product responses from networks already under DOJ scrutiny.
Third-order effects
- If the pattern holds — wallet, then merchant acceptance, then possibly a stablecoin — US payment infrastructure consolidates around bank-owned consortia, shifting the Visa/Mastercard duopoly's moat from network access to fraud, credit, and international reach.
The trend: US banks are systematically building their own payment rails — Zelle, a joint wallet, potentially a stablecoin — to reclaim transaction economics from the card networks.