ClearXchange Is Big, But Is It Catchy?

ClearXchange has access to a majority of the market's online banking accounts as it takes on Venmo, but there's one thing it may not have.

"If you look at Venmo, it's as much a verb as it is a noun…'venmo' me the money. It's tough to turn clearXchange into a verb," said Richard Crone, a payments consultant whose firm also researches marketing.

The bank-led clearXchange system is expected to launch a new brand for its P-to-P service, "Zelle," according to the Wall Street Journal. The paper attributed the report to unnamed sources, and Early Warning—clearXchange's operator—did not return a request for comment by deadline.

"Zelle has a new hip flair to it and it can be easily translated into a verb," Crone said. "'Zelle me the money' almost sounds like 'show me the money.'"

The name is not final, the Journal reported, but as of now it's scheduled to be unveiled in October. The paper also said clearXchange, which has operated for several years, has not been promoted as a consumer brand.

JPMorgan Chase, Bank of America and Well Fargo founded clearXchange as a way to attract consumers to an easy-to-use money transfer system—email or mobile phone numbers are all that's required to route most transactions.

The three founding banks cover more than half of the online banking market, and clearXchange has added other banks over the past four years, including community banks such as FirstBank and larger banks such as U.S. Bank.

Early Warning, a bank-driven risk management initiative that includes many of the same banks behind clearXchange, merged the two systems in 2015 to broaden the scale and scope of both ventures.

The bankers behind Early Warning and clearXchange also have broader ambitions for the service, including catalyzing faster payments and corporate disbursements. Getting P-to-P right in particular is considered a gateway for banks wishing to grab a broader share of corporate transactions such as payroll, health care and insurance payments.

The banks also hope to counter PayPal's Venmo social P-to-P app, a product that has proven popular with younger consumers. Like the banks, PayPal also sees mobile P-to-P as a pivot, including expanded in app mobile payments and improved collaboration with the card brands.    

ClearXchange is attracting users—it handled 46 million transactions in the first quarter, or $16 billion, well exceeding Venmo's $3.2 billion. But the popularity of the potential social aspect of P-to-P among retailers may be the real prize for the mobile P-to-P apps such as Venmo or 'Zelle.'

ClearXchange has a substantial advantage because of its size, though Venmo is expanding rapidly, Crone said, adding the social nature of Venmo is popular with retailers. A more 'active' brand like Zelle could be easier for retailers to pitch to consumers, similar to Facebook or Twitter, Crone said.

"Retailers want a public posting of their payments, and that is what Venmo has," Crone said. "Retailers fight and plead for that, for you to like them on Facebook or follow them in Twitter or view their videos on YouTube."