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Is ZellePay and the Zelle App Right For You?

8 Things You Need To Know!

The fees for transferring money between local US bank accounts can be expensive.

Transfers vary based on your transfer method – fees are in the $25-$30 USD range for wire transfers and $3-$5 USD for ACH transfers.

But what if you could bypass that fee and send money to your family, friends, and trusted businesses at little to no cost?

Zelle lets you do exactly that.

Unfortunately Zelle is far from perfect with a boat load of very poor reviews. But there is more to these negative reviews we found.

Today we uncover whether Zelle is the right option for your local bank-to-bank money transfers.

We dig deep to find out how Zelle actually works, whether they have an advantage over other similar services, and what real users think (including the negative reviews) about their Zelle transfer experience.

Let’s dive in!

Disclosure: This post contains affiliate links. For more information, see my disclosures here.

1. What is Zelle and the Zelle App?

Zelle is an instant money transfer method embedded into the mobile apps of participating banks in the US. With the Zelle App, both individuals and small businesses can send money and receive money by simply entering or sharing their phone number and email address.

Zelle supports most US banks and credit unions (like Chase, Bank of America, Wells Fargo, Citi, USBank), so you can send money instantly to people and businesses you trust. See the full list of participating banks and financial institutions here (opens new tab).

If you have an account with a non participating bank, you can still transfer money instantly and for free by downloading the stand alone Zelle app and linking your bank debit card.

However, Zelle is not a mobile wallet, unlike Venmo (See “Zelle vs Venmo” below).

2. How does Zelle work?

2.1 Signing up

Zelle enables signup either on your bank’s mobile app or by downloading Zelle’s standalone app and by registering and linking your US mobile number and bank account.

If you’re opting for Zelle via your bank’s app, your bank account will be linked to Zelle. But if you’re using the Zelle app, you’ll need to link your debit card.

But before you move on to sending and receiving money with Zelle, here are a couple of things you should know:

a) You can only sign up for Zelle via their own app if your bank doesn’t support Zelle transfers.
b) Both you and your recipient will need to be enrolled with Zelle to send and receive money.

If your recipient isn’t enrolled with Zelle, your bank will put a hold on your Zelle transaction till your recipient signs up to access their funds.

2.2 Sending money

You can send money to your recipient by simply entering their email address or phone number.

Make sure you get the details right!

However, each participating bank has sending limits based on rolling windows (daily, weekly, monthly, etc).

For example, Bank of America allows individuals to make 10 transfers up to $3500 USD each 24 hours, while small businesses are allowed to make 20 transfers of $15,000 USD each 24 hours.

2.3 Receiving Money

When someone sends you money, you’ll see the funds reflected in your account immediately.

And, there are no receiving limits on Zelle as an individual or a business.

3. Zelle Costs and Fees

The best thing about transferring money with Zelle is that you can send and receive money for free, instantly.

Zelle doesn’t charge you anything, typically neither does your participating bank (although it’s always a good idea to verify with them).

4. Zelle Safety and Security

Zelle is trusted by almost all high street banks in the US and credit unions, so you could say your money is “safe as a bank” with Zelle. Moreover, Zelle uses industry-leading encryption and monitoring methods to protect your data and money on their app.

However, Zelle’s mission is to replace cash and cheque payments, so you don’t have the payment protection protocols associated with credit cards and debit cards (for example, cancelling payments or disputing a transaction when you don’t receive the goods or services you paid for).

That’s why Zelle recommends you only pay people and businesses you know and trust with Zelle.

5. What Reviews Really Say (Incl. Negative Reviews)

Zelle is rated 1.2/5 on Trustpilot, which is pretty bad but this needs to be taken in context of just 256 reviews which we summarize below!

We also noted that only 3% of users had an “Excellent” experience with Zelle while 93% had a “poor” experience and we were keen to find out why.

After trawling through hundreds of reviews, both positive and negative, we noted that the top concerns of Zelle users were:

  • Inability to cancel a transfer
  • Refund delays
  • Account blocks

Inability to cancel a transfer

You can’t dispute or cancel a transfer on Zelle if your recipient is already enrolled with Zelle.

(If your recipient isn’t registered with Zelle, they have 14 days to sign up and claim that money and you can cancel your transfer in that period).

Moreover, Zelle insists that you only pay money to people and businesses you trust to minimize chances of being scammed. This is because Zelle intends to replace cash and cheque transactions and doesn’t have built-in “buyer protection” such as transfer disputes, unlike debit and credit cards.

Refund delays

Some users were dissatisfied with Zelle’s refund turnaround time. Since Zelle solves an important problem for their customers (low or no-cost bank transfers), they need to improve their customer service response times for refunds.

Account blocks

Finally, a few users noted that their account was blocked after they attempted to change their banking or debit card information.

Since Zelle doesn’t have typical buyer protection protocols, they conduct regular audits on accounts that trigger a “red flag,” such as an attempt to change sensitive financial data, to prevent theft (financial and identity) and fraud.

In context

Given the relatively small number of reviews, and the fact that ZellePay is integrated within most Banks Apps these negative reviews could just be a small collection of very frustrated people – the reviews for your bank are probably more important.

Not to say these folks did not have real issues, we are sure they did and we seek to understand the big picture fully.

Given that most complaints also relate to not being able to use the service and delays we think it important to not focus too much on the negative reviews – Zelle will most likely work really well for you.

6. Zelle vs Venmo vs PayPal vs Cash App

So – Zelle or Venmo or PayPal or Cash App – which instant money transfer service is right for you?

In this section, we’ll tell you what are the key differences between the three and when you can use which.

Zelle is a peer-to-peer money transfer method integrated with banking apps or can be used in isolation. When you register for Zelle from your banking app, your bank account is linked and when you use the standalone app, your debit card is linked.

Venmo, on the other hand, is a mobile wallet. This means, while you can link your bank account, credit card, and debit card with Venmo, you need to have money in your Venmo “wallet” to pay family, friends, businesses, or utility bills.

PayPal is a currency transfer service that lets you send small to moderate amounts of money both locally and internationally.

 ZelleVenmoPayPal
Payment MethodPayment method integrated into participating banks’ apps or to be used as a standalone app.Not integrated into mobile banking and must be used as a standalone app.Not integrated into banking apps and can be used as a standalone service
Instant TransfersInstant transfers (bank to bank only)Instant transfers (funded by bank account, debit card, or credit card)No instant transfers
Digital WalletNot a digital wallet - that is, you can’t “hold money” with ZelleVenmo is a digital walletHas a “wallet” feature (your PayPal balance)
Link to Credit CardCan’t link your credit cardCan link your credit cardCan link your bank account, debit card, and credit card
Free PaymentsAll payments are freeInstant transfers cost $0.25 USD per transfer while fees are higher when funded with a credit card (3% of the transfer amount)High fees
InternationalDoesn’t support international transfersDoesn’t support international transfersBoth local and international transfers
Size of PaymentsBoth big and small amountsSmall amounts onlyIdeal for small amounts

7. Can Zelle be used Internationally?

Zelle can only be used for local bank-to-bank transfers in the US (that is, both the sender and the receiver must have US bank accounts).

Zelle is also not supported in US territories such as the U.S. Virgin Islands, Puerto Rico, American Samoa, Guam and Northern Mariana Islands.

However, you have a number of options to send money abroad, depending on your specific needs. We discuss a few options below.

8. Zelle Alternatives for International Transfers

8.1 Small Amounts ($7000 USD and below)

While PayPal and Western Union may be top of mind for your international transfers from the US, there are many other currency transfer companies that can help you transfer funds at a fraction of the cost.

Review of TransferWise

TransferWise (Bank-to-bank transfers only | Personal and Business Transfers)

TransferWise (review) offers a transparent and affordable fee structure to send money abroad from the US to 50+ countries across the world.

And, with TransferWise Borderless (review), you also get a MasterCard debit card (great for traveling and online payments), bank details in major currencies (USD, CAD, GBP, EUR, AUD, NZD), and the ability to pay and get paid like a local in supported areas.

Fees: On average, TransferWise fees are between 0.4 – 1% of the transfer amount, which is extremely competitive compared to banks (who charge 3 – 5% of a transfer)

WorldRemit (Cash payouts supported | Personal and Business Transfers)

WorldRemit (review) is a great option if your recipient doesn’t have a local bank account because they support bank transfers, cash payouts, and mobile top ups to 150 countries worldwide.

Fees: WorldRemit’s exchange rate varies with market fluctuations and their fees depend on your target currency, the payout method, funding method, and the transfer amount.

They charge a margin on the exchange rate and their fees range between USD 3.99 and USD 24.99, depending on the currency and pay out method.

Remitly (Cash payouts supported | Personal Transfers only)

Remitly is available in 16 developed countries (including the US) to help immigrant workers send money home to developing countries at affordable rates.

Remitly is a great option for you if you want to send cash instantly to your family members as they support both bank-to-bank transfers, bank-to-cash, and card-to-cash transfers.

Fees: Remitly’s fees depend on the transfer speed (Economy is slower but more affordable while Express is instant but more expensive), target currency, amount, and how you fund your transfer.

8.2 Large and extra-large transfers ($7000 USD and above)

Review of OFX

If you want to send a large or extra-large amount of money from the US, you need to choose a provider

  • Who are registered and have an office in the US
  • Whose fee structure supports large transfers
  • Who has excellent customer service

If you want to send a large or extra-large amount of money from the US, you need to choose a provider

  • Who are registered and have an office in the US
  • Whose fee structure supports large transfers
  • Who has excellent customer service

In our experience, you’re good to go with OFX (review) for your large transfers from the US.

  • They are registered as a Money Service Business with the US Treasury’s Financial Crimes Enforcement Network (FINCEN)
  • They are regulated by the banking divisions of each state
  • They have an office in San Francisco
  • They offer excellent phone support
  • Their fees go down as the transfer amount goes up

Bottom line

Is Zelle the right choice for your local bank-to-bank transfers in the US?

If you’re an individual and need to pay small-to-moderate amounts to trusted people and businesses, Zelle is an excellent, low cost way to transfer money locally.

Zelle is also a good option for you if as a small business you need a fast and fee-free method of paying your trusted suppliers.

However, if you’re looking for advanced buyer protection protocols for all kinds of transfers ( both trusted and new recipients), you may be better off with ACH transfers or card payments.

But Zelle is not perfect.

Unfortunately, Zelle does have quite a few negative reviews (above) but we think this does not give you a complete picture of what to expect.

Zelle cannot help you for international transfers, but there are some great options that can.

Happy Payments!

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