⚠ Zelle and the Cost of Instant MoneyLow threat

Bank of America (BAC) — threat to the moat

Zelle makes Bank of America's customers stickier and puts the bank in court when fraudsters use it.

Instant payments are sticky, and they are also a source of legal risk. In December 2024 the Consumer Financial Protection Bureau sued Bank of America, its co-defendants and Early Warning Services, alleging that they did not adequately protect consumers from fraud on the Zelle network1.

Zelle value per quarter ($bn)144Q4 2025160Q2 2026Bank of America Q4 2025 and Q2 2026 results releases
More volume, more exposure.

The case is not described in the 2025 annual report's litigation section, but the processing of electronic payments, including through the Zelle network, remains among the matters the bank lists in its forward-looking risks2.

The exposure grows with use. Bank of America's Zelle users sent and received 495 million transactions worth $160 billion in the second quarter of 20263, against 474 million transactions worth $144 billion in the fourth quarter of 20254.

Zelle use is growing modestly. Active Zelle users were about 25 million in the fourth quarter of 20255 and 25.5 million in the second quarter of 2026, up 5%6. Slow user growth with faster volume growth means existing users are sending more, which raises both the benefit and the fraud exposure.

A settlement or regulation that made banks reimburse more fraud losses would turn some of that volume into cost. The disclosure in the forward-looking risk list is the thing to follow.

References
  1. ReportedIn December 2024 the Consumer Financial Protection Bureau sued Bank of America, its co-defendants and Early Warning Services, alleging that they did not adequately protect consumers from fraud on the Zelle 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 ↗
  2. ReportedThe case is not described in the 2025 annual report's litigation section, but the processing of electronic payments, including through the Zelle network, remains 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 ↗
  3. ReportedBank of America's Zelle users sent and received 495 million transactions worth $160 billion in the second quarter of 2026, against 474 million transactions worth $144 billion in the fourth quarter of 2025.
    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. ReportedBank of America's Zelle users sent and received 495 million transactions worth $160 billion in the second quarter of 2026, against 474 million transactions worth $144 billion in the fourth quarter of 2025.
    Bank of America fourth-quarter 2025 earnings release, Form 8-K exhibit 99.1. — Q4 2025 · publ. 14 January 2026 · source ↗
  5. ReportedActive Zelle users were about 25 million in the fourth quarter of 2025 and 25.5 million in the second quarter of 2026, up 5%.
    Bank of America fourth-quarter 2025 earnings release, Form 8-K exhibit 99.1. — Q4 2025 · publ. 14 January 2026 · source ↗
  6. ReportedActive Zelle users were about 25 million in the fourth quarter of 2025 and 25.5 million in the second quarter of 2026, up 5%.
    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 ↗
Sources
Generated September 25, 2026