What Is Zelle, How Does Zelle Works? [All You Need To Know]

We are in a digital era where most of the work that was formally done by hands, such as; writing of checks and signing a signature before withdrawing money from a bank account is now done through digital platforms which permits you to sit at the comfort of your home or business location and initiate a transaction from your bank account or to your bank account.

Platforms like: Zelle, Venmo, PayPal, Cash App, Apple Pay, and Google Pay, can enable this process. If you have ever heard of Zelle, or wonder how you can use Zelle to initiate a transfer online, then this article is for you.

In this article, you will know what Zelle is, how Zelle works, the features of Zelle, and disadvantages of using Zelle.

What Is Zelle?

Zelle is a digital payment platform that is operated by banks such as The Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, and Wells Fargo.

The Zelle app enable individuals to digitally transfer money across the United States of America from their bank account to another bank account using their mobile phone or the website of the participating bank.

Zelle enables you to transfer money either through an instant or a standard payment to families and friends. As of  2022, Zelle is used by 80% of U.S citizens through the banking website and also accepted by over 1,800 financial institutions.

Zelle does not support transactions outside the U.S. It competitors are PayPal and Venmo.

The Zelle Service and Mobile app is owned by Early Warning Service, LLC. It is intended to be used for transactions between trustworthy persons.

Zelle is a safe, easy and fastest way to send money to anyone. Your payee most not necessarily have an account in the same bank as you. So long as  both banks are U.S based then you can make a transfer.

What Are the Features of Zelle?

Zelle has the following features:

• Money transferred using Zelle is not Subjected to any charged fees.
• Zelle permits instant transfers to a U.S bank account ( within minutes).
• Zelle is faster and easy to use.
• With Zelle, you can send, received or split payments.
• Zelle has no receiving limits. This means that you can receive any amount using Zelle into your bank account.
• Zelle integrates with banking apps.

How Does Zelle Works?

Zelle is a mobile peer-to-peer payment service that enable you to transfer money from your Savings or Checking account to someone's bank account you already know in the United States.

You most not necessarily have their bank account details before making a transaction through Zelle. With just their phone number or email address, you can send or request money through Zelle. Zelle will then send them an email or a text message to let them know that a payment is pending.

How to Send Money Through Zelle

To send Money through  Zelle:

Download the banking app of your bank or login to your bank website that is if your bank accepts the Zelle service. You can also download the Zelle app from Google Play or Apple Store and log in your details as indicated by the app.

You need to link your email address, U.S phone number and your bank account details to Zelle. This will help in initiating a direct transaction from your bank account.

To send money, you need to enter the email address or U.S phone number of the recipient in the space provided. The app will direct you on how to push through.

After you enter the amount and confirm it, the money will go directly into their bank account if the recipient has already enrolled their account with Zelle. Or the transaction will be pending if they have not linked up their account with Zelle. They can only received a message instructing them to link up their account.

What are the Demerits(Disadvantages) of Using Zelle?

Aside from the adventages of using Zelle (features), there are still some demerits:

1. Zelle does not support international transactions out of the United States.
2. You can not cancel a payment once it is done and the recipient has receive it already.
3. Zelle does not support credit cards payments. This means that you can't send money to a credit card through Zelle payment services.
4. Zelle is only for U.S Based banks and it is also not protected against fraud.
5. You cannot use Zelle to send money to a mobile money account.

Who are the Competitors of Zelle?

Venmo, Xoom and PayPal are apps competing with Zelle. Venmo and PayPal are online banks but Zelle is a free payment interface between two bank accounts.

Venmo app accept transfers into a credit card, PayPal accepts international transfers and Xoom allows payments into a mobile phone wallet.

Do I Need A Bank Account to Be able to Used Zelle?

Yes you need to have a bank account. Zelle is simply a payment interface between two U.S bank account. This means that Zelle payment service will only work with a bank account that it is linked to. 

To link a bank account to Zelle, you need your Bank name, account name, email address, U.S phone number and a security code. Open the Zelle app and follow instructions.

Can I Use Zelle?

Yes/No. Yes, if you are a U.S citizen with a U.S bank account and a phone number. People out of the U.S can use Zelle if they buy a U.S phone number.

No, if you are not base in the United States and you don't have a U.S bank account or a phone number.

Can I Cancel a Payment On Zelle?

You can not cancel a payment once you have initiated it and the receiver has already cash in. You can only cancel a transaction if the recipient has not yet received.

It is advisable to verified and confirm all details before making a transaction. Zelle does not protect against fraud, so we recommend dealing with trustworthy individuals.

What are the transfer Limits through Zelle?

Zelle has both daily and monthly transfer limits.

You can transfer up to $2,000 per day from your bank account using Zelle and monthly transfers can go up to $10,000.

Note that the transfer limits are determined by proceeding bank.

Final Thought

Zelle is a peer-to-peer payment service available for transactions from Banks and Credit Unions across the United States of America.

Zelle is easy, faster and free to use and preferable for making payments to trustworthy individuals, family and friends.

With Zelle you can enroll your bank account and make instant transfers to another account. You can use Zelle through your banking website or  download the app and install your bank details.