Zelle Review: What You Need To Know and How It Works

GOBankingRates Score

4.3
Our Take: Zelle is a peer-to-peer money transfer service that allows users to send and receive money in a matter of minutes. It's easy to use, charges no fees and is compatible with major banks and credit unions. Zelle offers millions of consumers a better alternative to transferring money than handling cash, mailing checks and visiting the bank.
  • Transaction Fees
    4.8
  • Ease of Use
    4.5
  • Fund Transfers
    4.2
  • Risk of Fraud
    3.5
How did we calculate this?

Zelle reviews from users are a clear indication of the money transfer service’s qualities. The pros and cons of Zelle include:

Pros

  • Fast money transfers
  • No fees
  • Compatible with major banks and credit unions
  • Easy to use

Cons

  • No canceling transfers once authorized
  • Risk of fraud

About Zelle

Zelle is a peer-to-peer money transfer service that lets you send and receive money. Zelle has made transfers easy for millions of consumers — you don’t have to handle cash, mail checks or visit the bank anymore.

Zelle is growing immensely, with $307 billion sent on 1.2 billion transactions in 2020 alone, representing a 62% increase from 2019. It also recorded nearly 500 new financial institutions that joined their network.

Most credit unions and major banks, including Chase, Bank of America, Wells Fargo and Citi, are part of the Zelle network. You can download the Zelle app to your smartphone or use your mobile banking app and start using Zelle right away.

How Zelle Works

Zelle allows you to transfer money from one checking account to another. Unlike most banking transfers between accounts that require account numbers to initiate transactions, which may take several business days, you can transfer funds with Zelle in a matter of minutes.

Sending Money

To send money, you need the email address and phone number of the person you’re sending money to. Once you authorize the transfer, the recipient will receive a notification from Zelle stating that money is waiting for them. If the recipient is already enrolled with Zelle, the money will go directly to their bank account.

Receiving Money

To receive money with Zelle, your sender will need your email address or phone number. If the sender initiates the transaction and you haven’t enrolled with Zelle, you’ll receive a notification explaining how to receive the funds faster.

Also, even if your bank or credit union is not listed in Zelle’s network, you can still receive the funds. Simply download the Zelle app and register with your email address, phone number, and Visa or Mastercard debit card.

Once registered, you can accept the payment, though it may take up to three days to receive the payment if you’re using Zelle for the first time.

What Banks Use Zelle?

Zelle is compatible with different banks and credit unions. Some of the major banks include:

Here is a list of all banks and credit unions in Zelle’s network. Simply search from the list for the bank or credit union where you have a bank account and enroll. If your bank works with Zelle, you’ll be directed to your banking app. You can still use Zelle to send and receive money if your participating bank is not listed.

Sending Limits

If your financial institution doesn’t offer Zelle, your limit for sending money is $500 per week. But, if your bank is listed in Zelle’s network, you can send larger sums of money. Contact your bank or credit union to find out more about their sending limits through Zelle.

Fees

Zelle doesn’t charge any fees to send or receive money, and your financial institution may not charge either. But it’s a good idea to confirm with your bank or credit union if there are any additional fees.

Is Zelle Safe?

No payment method is completely risk-free. Zelle has, however, put in place authentication and monitoring measures to ensure secure transactions. Plus, if you’re using Zelle through your bank’s app, the Federal Deposit Insurance Corporation may come into play.

Compared to dealing with paper checks and handling cash, Zelle could be a safer option to send and receive money. Since funds don’t go through a third party, your money is insured. Moreover, the bank associated with your Zelle profile is protecting your financial data.

Risks When Using Zelle

One forewarning of using Zelle is that you need to send money to people you know and trust. This is because money moves quickly, and once you authorize a transaction and the recipient is already enrolled with Zelle, you can’t cancel. For this reason, you need to double-check the recipient’s email address and phone number to avoid sending funds to the wrong person.

Another caution of using Zelle is to not share your sensitive financial or personal information when sending or receiving money. The only information you need to share is your phone number or email address associated with your U.S. bank account.

Keep In Mind

Zelle’s speed in transferring funds could be a fertile ground for criminals because money moves directly to your bank account. The attacker will only need your phone number or email address. You can easily fall victim to a scam if you are not vigilant.

An example of a scam would be if you authorize a payment for goods or services to a seller who said they were going to provide but you didn’t receive the product. Since you authorized the payment, you may not be able to get your money back.

If you think you’ve fallen victim to fraud or been scammed, Zelle recommends that you contact your bank or credit union immediately to see if they can get your funds back.

Zelle vs. Competitors

Here’s a quick comparison of the three payment methods. These features are available on their respective mobile apps.

Payment Method Fees Limits
Zelle 0% -$500 per week for financial institutions that don’t offer Zelle
-Larger sums for banks and credit unions that offer Zelle
Venmo -0% for receiving/sending money from balance, linked bank account, debit card, or prepaid card
-1% for instant transfers
-3% for sending funds from a credit card
-$299.99 per week for person-to-person
-$4,999.99 per week after verification
-$6,999.99 per week for Mastercard debit card purchases
PayPal 2.9%+ $0.30 per transaction $60,000; limits may apply depending on your currency

Zelle vs. Venmo

Venmo is a subsidiary of PayPal, which allows users to send and receive money. Like Zelle, you can authorize a transaction as long as you have the recipient’s email and phone number. Both the sender and the recipient must have a Venmo account. Here are some of the notable features of Venmo:

  • Social element: Venmo also has a social feature that allows you to make your transactions public so that they appear in your timeline. The feature enables friends who follow you to see what you’re doing on the app, meaning who you’re paying and for what. The amount is, however, not displayed.
  • Hold a balance: Unlike Zelle, where transfers take place between bank accounts, you can hold a balance in your Venmo account that you can transfer to your checking or savings account. If you don’t have a balance, you can draw from your linked bank account.
  • Fees: Venmo doesn’t charge any fees for receiving or withdrawing funds into your bank account or sending money using your Venmo balance, linked bank account, debit card, or prepaid card.

The only drawback of using Venmo is that you’ll need to pay a 3% fee if you send money using your credit card. If you need an immediate transfer to your bank account, Venmo also charges a 1% fee.

Zelle vs. PayPal

PayPal is one of the most popular payment methods across the globe. The platform is known for its help in the e-commerce industry, especially for online payments. It also offers P2P money transfers — as long as the sender and the recipient have a registered PayPal account.

  • Limits: Compared to Zelle and Venmo, PayPal has higher sending limits of up to $60,000, provided that your account is verified. However, PayPal can limit the amount you send to $10,000 in a single transaction, which can vary depending on your currency. You can also fund your account using a credit card, debit card, PayPal balance or PayPal credit.
  • Fees: When it comes to transaction fees, PayPal charges 2.9%+ $0.30 per transaction for all credit and debit card transactions.

One significant advantage of using PayPal is that you can cancel a transaction before the recipient claims.

Final Take

While it’s a fast and easy way to send and receive money, Zelle recommends sending money to people you know and trust. Further, you should confirm the recipient’s personal information before authorizing a transaction to avoid sending money to the wrong people.

Editor’s Note

Overall, Zelle is a great P2P money transfer service. The almost-instant and free transfers make Zelle a great choice for many. If you’re looking for a money transfer service that works almost immediately, Zelle might be a good option for you.

Zelle FAQ

Here are the answers to some questions people often ask about Zelle.
  • How do I send and receive money on Zelle?
    • To send money, you need the email address or phone number of the recipient. If they are already enrolled with Zelle, the money will go directly to their bank account. To receive money with Zelle, your sender will need your email address or phone number. If the sender initiates the transaction and you haven't enrolled with Zelle, you'll receive a notification stating that money is waiting for you. You must register with Zelle to accept the money.
  • How long does it take to receive money from Zelle?
    • If the person you're sending money to has already enrolled with Zelle, the money should be in their account within minutes.
  • Is there a fee to use Zelle?
    • Zelle doesn't charge any feed to send and receive money.
  • Can I cancel a payment on Zelle?
    • You can only cancel a payment if the recipient hasn't enrolled with Zelle. Otherwise, you cannot.
  • Can I use Zelle if my bank doesn't?
    • Yes, you can use Zelle even if your bank or credit union doesn't. Simply download the Zelle app and sign up using your phone number, email address and debit card.

About the Author

Lydia Kibet has been writing professionally since 2017. Her passion for helping brands in all aspects of content marketing flows through in the expert industry coverage she provides — personal finance, investing and healthcare. Her work has been featured in The Motley Fool, Investor Junkie, Green Market Report, and Medical News Today. When she’s not writing, she’s either reading, playing guitar or catching up with nature. Follow her on Twitter.
Zelle Review: What You Need To Know and How It Works
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