The news: Zelle expanded its Minority Depository Institution (MDI) access program to include more community banks and credit unions, per a press release.

The expansion will be supported through a renewed partnership with Valera and Jack Henry, which support the tech stacks for credit unions and community banks, respectively.

MDIs are defined as federally insured depository institutions that have either 51% minority ownership or a board of directors that is at least 51% minority and serves a predominantly minority community.

Why this matters: MDIs are critical for elevating minority Americans’ economic mobility and community resilience, particularly Black Americans. 

Partnering with Zelle could help these smaller FIs meet underbanked communities’ need for faster payments: 98% of smaller institutions say instant payments influence how consumers choose their bank, per a Zelle survey, and only 6% think they can stay competitive without instant payments.

More minorities gaining access to bank-based P2P payments could hurt Cash App. Block’s P2P strategy has long centered on drawing these demographics in its ecosystem with popular lending products like Cash App Green, which drove revenues for its last reported quarter.

• 59% of Black Americans and 37% of Hispanic Americans report having ever used Cash App, compared to 17% of White Americans and 16% of Asian Americans, per Pew Research.
• 36% of lower-income adults report using Cash App, versus 24% and 18% of middle- and upper-income adults.

Implications for payment providers: Offering seamless P2P payments could drive where a US consumer meets many of their financial needs. 

Making onboarding as simple as possible and embedding rewards for repeated app use can defend against those users defecting to other payment solutions.