In the digital age, there are numerous cashless ways to send and receive money. One of the fastest and easiest ways is via a Zelle money transfer.
It’s one of many peer-to-peer payment systems available today, and it has some distinct advantages over its competitors like Paypal and Venmo. Read on to learn all about Zelle and how to use it.
How Does a Zelle Money Transfer Work?
What is Zelle, exactly? And how does it work?
Zelle is a service that facilitates transferring money between two individual bank accounts. 30 U.S. banks worked together to develop the service, and today Zelle is partnered with over 300 banks and credit unions.
These partnerships mean that you don’t have to have a separate app to use Zelle. The service is integrated into much online banking and mobile banking platforms. It also means that Zelle money transfers are protected with the same security measures that the banks use, keeping your account information protected.
Making a transfer with Zelle is easy because you don’t need any other person’s bank account information. All you need is their phone number or email address.
Sending Money With Zelle
There are two ways to send money with Zelle. The first is if your bank or credit union is partnered with Zelle, and the second way is if your banking institution isn’t partnered with Zelle.
When your bank is part of the Zelle network, you can access Zelle from your bank’s mobile or online banking system. Usually, it’s under “Money Transfer” or “Send and Receive Money.” Some banks may even have a separate menu for Zelle.
Once you select Zelle, all you need to do is enter the phone number or email address of the person you’re sending money to, select the account you want to use, and set the amount you want to pay. Then hit submit and the money will be on its way!
If your bank isn’t part of the Zelle network, then you can use the Zelle app to pay. You can link any debit card from a U.S. bank account to the Zelle app. Sending money through the app works the same way as it does through your bank.
First, you provide the phone number or email address of the recipient. Then you set the amount you want to send and select the account you’re sending the money from. Then you submit, and the transfer starts immediately.
Receiving Money With Zelle
It’s just as easy to receive money with Zelle as it is to send it. When someone sends you money via Zelle, you’ll receive a notification to the email address or phone number they used. If you have a Zelle account already, the money will move to your account within minutes, and you don’t have to take any additional action.
If you don’t have Zelle set up yet, your notification will include instructions for signing up for Zelle. Once your Zelle account is active, then the transfer will start.
The transfer is almost instant if you have a Zelle account. If you don’t, then you will be prompted to register with Zelle. Then there is a wait of 1-3 business days to release the funds.
This is a security measure so that Zelle can verify your information first. It also gives the sender the opportunity to stop the transfer if it was a mistake.
The Benefits of Using Zelle
The biggest benefit of using Zelle comes from its status as a banking service. Transactions through online banking platforms are secure and safe. Because Zelle sends money from bank account to bank account, it’s also faster than many other peer-to-peer services.
Having a large network of banks is an upside to Zelle. Friends with different banks can easily split the check when dining out together, and roommates can settle the utility bills without waiting days for the transaction to process.
Zelle isn’t just for large national banks. If your bank has an online banking system, it likely has Zelle. Whether you’re using a huge national chain or logging into a regional bank, Zelle works the same.
Even if your bank isn’t in the network, Zelle is still accessible for anyone with a debit card. The Zelle app works with all debit cards, regardless of what bank they’re from.
Another place Zelle outshines the competitors is with transfer limits. In the app, Zelle has a $500 weekly limit for transfers. Zelle doesn’t put any transfer limits on transactions with connected banks, and there is no cap on how much money you can receive via Zelle.
However, you should check with your bank to see if they have any caps or rules associated with money transfers.
Zelle also doesn’t charge any fees for their service; every transaction is free. As with transfer limits, though, you should check with your bank to see if they have any fees associated with using Zelle.
The Drawbacks of Using Zelle
The biggest drawback for Zelle is that it is limited to U.S. banks. Currently, it only works with American bank accounts and debit cards, and the phone number you use for Zelle also has to be a U.S. number.
The Zelle app is also exclusive to smartphones. For users whose banks aren’t in the Zelle network, you can only access Zelle via a smartphone and not via a desktop computer.
Zelle is also limited to debit card users. Other peer-to-peer payment systems have credit card options, usually for a fee. For Zelle, you’ll need to have money in the bank, and you won’t be able to rely on credit.
The final drawback is that because transfers with Zelle are so fast, it’s difficult to correct mistakes. If you accidentally send the wrong amount of money or send it to the wrong person, it’s not usually possible to reverse the transfer. You should only send money via Zelle transfer to people you know and trust.
Ready to Use Zelle?
Using the Zelle money transfer service is an easy, free way to send and receive the money within a group of people you know and trust. The service is widespread and user-friendly, which makes it a great choice for a peer-to-peer payment system. Next time you need to give money to a friend, consider using Zelle.
Check out our other blog posts on tech for more great insights into how technology changes the way we use money.