For most of the 20th century, one of the most reliable ways to send money across the country or even oceans was to use something like Western Union. To give you an idea, they used telegraphs to keep track of money movements. We’ve come quite a long way since then.
Now, Zelle is quickly becoming a favorite method of moving money around or even just paying people back for little things like a cup of coffee. Let’s explain why.

What is Zelle?

Zelle is a service that allows you to send money to and receive money from friends. Generally, the recipient and sender only need to have a U.S.-based bank account, though there are a few exceptions which we’ll explain later.

That is a simple description of Zelle®, but there is more to it than that.

How does Zelle work?

Other peer-to-peer money transfer services like Venmo have a road bump in the process. You usually have to transfer between accounts held on the service’s platform. Then, withdrawing the funds back to your bank account can take some time.

With Zelle, money received is deposited directly into your bank account within minutes. Money sent is deducted from the other account at the same time. It provides perhaps the fastest method of transferring money across the country.

It is a digital payments network owned distantly by some of the top banks in the U.S., such as Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo.

How to use Zelle from start to finish

Here’s a quick guide of the steps to take to send money using the mobile banking app.

Triple check the mobile number of the person you’re sending to and that the person uses it at their bank.
Navigate to your bank app and find the “send money with Zelle” button.
Click it and pick the “send” option.
If you don’t already have the intended recipient, click “add a recipient.”
To add a recipient, you’ll need either an email address or a U.S. mobile number as well as the person’s name. Enter those details and click done.
Click on your friend’s name, and confirm if you see a window asking: “are you sure?”
Enter the amount and click review.
Check the information, enter a memo (if it’s an option), and click “send.”
You did it!

To receive money, use steps 1 and 2 above but pick the request money option. The rest of the steps to send money to friends using the mobile app are the same.

What are the benefits?

Free to use – Zelle does not charge a fee of any kind to send or receive money. It is a value-added service provided by the partner banks to their customers.
Faster transfer time – instead of taking days, it only takes minutes to complete the money transfers.
No cash required – you can reduce the reliance on keeping cash around, and transfers take place directly from a smartphone.
Relatively large network – over 100 million U.S. residents have access to Zelle via their bank, so the likelihood of meeting someone who has access is high.

What are the drawbacks?

While Zelle brings peer-to-peer payments into the modern world, it comes with a few catches you should keep in mind:

United States only service – Currently Zelle only supports U.S-issued checking/savings accounts at enrolled banks. International payments don’t qualify. Users must have accounts at supported U.S. financial institutions.
No credit cards allowed – unlike competition such as Venmo, it does not allow users to transfer money from credit cards.
Can’t cancel transfers – Once you hit send, you can’t cancel Zelle transfers. Make absolutely sure all recipient details are correct beforehand. Contact your bank if you run into issues with errors or possible fraud.
May need a smartphone – Many banks in the network allow Zelle transfers from a desktop, but others may only have Zelle accessible from their smartphone or even only through the Zelle app.
Variable limits – Maximum send amounts per day/month depend on your specific bank and account history. The typical limit sits around $2,500 daily but can range from $500 to $10,000. Some banks require waiting periods to send higher sums.
ID verification – You may have to complete identity verification or confirm small test transfers for enhanced security before sending or receiving larger amounts consistently.

As you can see, most limitations relate to fast payments and security precautions. The benefits Zelle brings still outweighs minor hassles for most. Still take precautions which brings us to…

Avoiding Zelle scams and costly errors

Like any financial transaction, users should take precautions to reduce risks of scams or unintended transfers when using Zelle with for online banking:

Double check all recipient contact details before sending payments – names, numbers, email addresses etc. Misdirected payments get rejected and returned minus fees. Recovering funds takes time.
Avoid accidentally sending to the wrong person – Only transact with people you fully know and trust using their mobile number or email address. Never rush payments to strangers.
Watch for fraudulent payment requests from hacked accounts or scammers impersonating contacts. Verify legitimacy if you suspect anything odd.
Use strong passwords for your bank accounts – Treat Zelle payments like cash transactions. They move fast, so more vigilance beats fraud when you send and receive money. If issues arise, notify your bank ASAP.

By taking a few moments to confirm details and use sound judgment, Zelle keeps your money transfers secure.

Final thoughts: Zelle money transfer

Zelle is a huge step forward in making it easier to send and receive money for small things between friends. You don’t have to keep cash on you; the process is so simple, fast, and secure that, as long as you double-check the phone number or email address for the contact, it’s a solid method to move money around. Our Accounting firm accepts it as a method of payment, contact us if you need more information.

Zelle: Easily send and receive money to friends and family