Bank-backed payment service Zelle crossed $32 billion in transactions in the last quarter, almost twice that of Venmo, but the P2P provider is not as omnipresent among banks as one would expect it to be.

“P2P payments are significantly up this quarter, like 250% up,” Robb Gaynor, general manager of digital banking for Malauzai, a Finastra company, told Bank Innovation. “But only 20 FIs or so are on Zelle. Makes you wonder, ‘Where is Zelle?’”

One of the issues is that the process of integrating Zelle is a long one. From a technology standpoint, both the bank’s digital provider and core processor need to be aligned with each other in order to provide the capability. Companies like Finastra can help banks with this.

Then there is the aspect of regulatory and compliance as well, which can be tedious. But perhaps the most challenging component for the smaller community banks is Zelle itself.

Take, for example, First State Bank of St. Charles, Mo. Luanne Cundiff, president and CEO at the American Banker Association conference a few weeks ago said on a panel, “We signed up for Zelle…We thought by Q1 this year we’d have it, and we’re still waiting.”

Cundiff declined to speak with Bank Innovation on this topic.

Another source, who requested to remain unnamed, told Bank Innovation that “this is a pretty common issue smaller community banks face. We are constantly reminded by the industry of how important Zelle is, but then we cannot get on it, either because we are too small for Zelle to accept us or because the queue is so long that the wait is indefinite.”

But banks have other options. Billpay services from core processors like CheckFreePay, or Jack Henry’s iPay, for instance, are other options, according to Malauzai’s Gaynor.

Further, with the advent of realtime payment rails, these smaller banks might not even need Zelle. P2P services, like Zelle or Venmo, are not technically realtime, Peter Davey, head of innovation at The Clearing House (TCH) explained to Bank Innovation.

“Bank-centric P2P are either ACH based or debit/credit rail-based,” Davey said. “This means that, although you see the money withdrawn or credited to your account in realtime, the actual clearing and settlement still takes time.”

Once banks are integrated on the RTP rail, everything will be realtime. “And then the RTP P2P alternative services might be easier and cheaper than Zelle for the smaller banks and credit unions,” Gaynor said.

TCH’s Davey agrees.

“Realtime payment is a pro-competitive system,” Davey said. “We are working closely with Zelle, but we are also talking to billers and corporates.”

Zelle, operated by Early Warning Services, processed 116 million transactions and $32 billion worth of payments in the third quarter. According to its earnings report, transaction volume increased 16% and total money moved increased 13% over the previous quarter.

Bank Innovation has a follow-up story based on Zelle’s comments. Read that story here.