By Hannah Lang

Oct 31 (Reuters) - Peer-to-peer payments platform Zelle is shifting users away from its stand-alone mobile app in favor of using the platform via banking apps, Zelle's parent company said on Thursday.

Zelle, a payments network owned by seven banks including JPMorgan Chase and Bank of America , initially promoted its mobile app when it launched in 2017 to users whose financial institutions had not yet joined the network.

But now, with more than 2,200 banks and credit unions on the Zelle network, only 2% of Zelle transactions take place through the mobile app, according to Early Warning Services $(EWS)$, the banks' company that owns Zelle.

As a result, Zelle will focus on improving its functionality on banking apps, where the majority of users choose to send and receive payments, said Denise Leonhard, general manager of Zelle.

"Given that that is really the strategy and the majority of the use that we're seeing, we are really pivoting in order to strengthen that going forward," she said.

The move highlights how widely Zelle has been adopted by U.S. banks, despite competition from big tech competitors like ApplePay and GooglePay.

The separate Zelle app will continue to be available, but will be dedicated to educating consumers about scams and fraud and will offer a list of participating firms on the Zelle network.

Users of the standalone Zelle app will need to re-enroll at their bank or credit union to be able to send and receive payments on the network starting in March 2025.

Reports of fraud and scams on Zelle have attracted attention from U.S. lawmakers, including Democratic Senator Elizabeth Warren, and from regulators concerned over consumer protection. Last year, banks on the Zelle network began refunding victims of imposter scams to address consumer protection concerns.

(Reporting by Hannah Lang in New York; Editing by David Holmes)

((Hannah.Lang@thomsonreuters.com;))