The Story of Zelle v. Venmo

Published October 27, 2026

The Story of Zelle v. Venmo

Venmo taught US banks the famous Michael Jackson lesson that if you don’t act on your ideas fast enough, God will give it to your competitors. This is the story of how zelle was founded and the long, hard battle it took to get us here.

Sending money to somebody at a diff bank has been a thing since forever, and there were several banks that offered this service already. Even non-banks like paypal already did too. But this idea of sending money to ANYONE no matter where they banked and only knowing their email or phone number and they could get the money without creating a new bank account or a new paypal account, that was a NEW IDEA. And that was the idea the banks received first. They actually received it 10 years earlier, they just didn’t act on it fast enough

In practice, this is a very hard problem to solve because you need to build a trustworthy directory, right? A directory of what email belongs to what verified bank account and each bank has to be willing to put up their own directory so that the pool of information is large enough where anyone CAN just send money to anyone with their # or email. Building it is easy, getting other banks to opt in was where all the drama was.

JP Morgan had their own product that did this, WF and BAC started a company to do this too, Citi also had their own version. And so by the time the 3 major banks decided to come together and build one company that will operate one directory, God had already given the idea to Venmo’s founders and Venmo was already catching up.

That company that those 3 big banks decided to build together was called clearxchange and when they announced it in 2011, apparently other banks were annoyed that they weren’t invited to join the network. So Capital One joins, and then first bank. By 2016, Clearexchange was bought by another company the banks own called early warning and that was when they renamed it to zelle, had this splashy launch and then more and more banks started to sign into the network too. And today zelle processes more than $1T in transfer volume yearly and venmo about $300bn. Perhaps it is okay for God to give your idea to your competitor, as long as you still get $1T out of it….

The Story of Zelle v. Venmo

Further Reading