The Zelle Co-Defendants: Rivals Who Share the RailsNarrow moat

Bank of America (BAC) — moat facet

Bank of America shares its instant-payment network, and a federal lawsuit about it, with the two rivals it most wants to beat.

Some of Bank of America's rivals are also its partners. When the Consumer Financial Protection Bureau sued over fraud on the Zelle network in December 2024, it named Bank of America's national bank alongside co-defendants including JPMorgan, Wells Fargo and Early Warning Services1. The bureau alleged they did not adequately protect consumers from fraud on the network2.

Zelle transactions at Bank of America, per quarter (millions)474MQ4 2025495MQ2 2026Bank of America Q4 2025 and Q2 2026 results releases
Growing, on a network the rivals share.

The shared rails are valuable to each bank. Bank of America had 25.5 million active Zelle users in the second quarter of 2026, up 5%, who sent and received 495 million transactions worth $160 billion3. Instant person-to-person payments keep a customer's money inside a bank account rather than in a separate app.

Sharing infrastructure changes how the rivalry works. None of these banks can use Zelle to win customers from the others, because the others have it too; the network raises the value of a checking account at all of them against non-bank payment apps.

The suit is not described in the 2025 annual report's litigation section, but the processing of electronic payments, including through the Zelle network, is among the matters the bank lists in its forward-looking risks4.

The volume is growing faster than users. Transactions rose from 474 million worth $144 billion in the fourth quarter of 2025 to 495 million worth $160 billion in the second quarter of 202656, so the average payment is getting larger.

The relationship is a truce, and its cost is shared liability. The Zelle volume Bank of America reports each quarter is the measure of the benefit; any settlement that required the banks to reimburse fraud losses would measure the cost.

Moat trajectory: Holding steady

Zelle users up 5%; lawsuit not in the 2025 litigation section.

The number that tests this moat
Reported
Zelle transactions, latest quarter
495 million worth $160bn (Q2 2026)

The value of the shared rails to Bank of America's customers; falling volume would mean non-bank apps were winning the payments.

Source: Bank of America Q2 2026 earnings release ↗
References
  1. ReportedWhen the Consumer Financial Protection Bureau sued over fraud on the Zelle network in December 2024, it named Bank of America's national bank alongside co-defendants including JPMorgan, Wells Fargo and Early Warning Services.
    Bank of America Form 10-K for fiscal 2024 - the CFPB suit over the Zelle network and segment figures for 2022. — FY2024 · publ. February 2025 · source ↗
  2. ReportedThe bureau alleged they did not adequately protect consumers from fraud on the network.
    Bank of America Form 10-K for fiscal 2024 - the CFPB suit over the Zelle network and segment figures for 2022. — FY2024 · publ. February 2025 · source ↗
  3. ReportedBank of America had 25.5 million active Zelle users in the second quarter of 2026, up 5%, who sent and received 495 million transactions worth $160 billion.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - consumer and digital highlights: checking accounts, Zelle, Erica, BofA Rewards, financial centers. — Q2 2026 · publ. 14 July 2026 · source ↗
  4. ReportedThe suit is not described in the 2025 annual report's litigation section, but the processing of electronic payments, including through the Zelle network, is among the matters the bank lists in its forward-looking risks.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - consumer and digital highlights: checking accounts, Zelle, Erica, BofA Rewards, financial centers. — Q2 2026 · publ. 14 July 2026 · source ↗
  5. ReportedTransactions rose from 474 million worth $144 billion in the fourth quarter of 2025 to 495 million worth $160 billion in the second quarter of 2026, so the average payment is getting larger.
    Bank of America fourth-quarter 2025 earnings release, Form 8-K exhibit 99.1. — Q4 2025 · publ. 14 January 2026 · source ↗
  6. ReportedTransactions rose from 474 million worth $144 billion in the fourth quarter of 2025 to 495 million worth $160 billion in the second quarter of 2026, so the average payment is getting larger.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - consolidated results, credit quality, capital and forward-looking risks. — Q2 2026 · publ. 14 July 2026 · source ↗
Sources
Generated September 25, 2026