What is Zelle and is Zelle Safe to Use?
Forget about the hassle of mailing a check! You can now easily and safely send as well as receive money instantly and without fear. This can be done through your trusted banking app or Zelle app if in case your bank does not offer Zelle.
What is Zelle?
Zelle, a person-to-person mobile payment platform, enables bank customers to send money anywhere across the globe in a matter of minutes. Thousands of new users register themselves every day on Zelle. Zelle reported that approximately $75 billion passed through Zelle’s network in the year 2017 alone. It is proving to be a tough completion to its rival mobile payment service Venmo, owned by PayPal as the amount is two times more than the amount of money that people transferred through Venmo.
Zelle is owned by Early Warning and is also the new name for the ClearXchange network. This payment platform is supported by at least 19 US banks (the list continues to grow). Payment giants like Visa and Mastercard are included in the 24 partner companies listed on Zelle’s website.
Zelle’s standalone app can be downloaded on to the smartphones. One of the reasons that make Zelle a secure payment platform is the fact that it is integrated within the mobile banking apps of big participating banks like Chase, Citi, Bank of America, and Wells Fargo among many others. So, all customers with these banks' mobile apps can use Zelle immediately.
How Zelle Works
Unlike other payment platforms like Venmo, money transferred using Zelle goes directly from one bank account to the other. Banking transactions usually ask for account numbers to perform the transactions, and these can take a couple of business days. With Zelle, a transaction is made simple as you can transfer money from one checking account to another within a few minutes.
All you need to transfer funds is the phone number or email address of the person you want to send the money to. The recipient is then sent a text or email informing them of the payment that is waiting for them. They would need to click on the link to accept it. If their bank is a participating partner of Zelle, they would only need to sign in for the service through their bank’s mobile app or website with the specified phone number or email address.
Is Zelle Safe to Use? - Benefits and Advantages
Zelle is more promising than many of its rivals, starting with greater security. The disadvantage of many payment platforms is because they operate as a third party. Instead of the funds being transferred directly from the senders’ bank account to the recipient’s bank account, most payment platforms receive the funds in their respective balance account. This amount is then transferred to a checking account. There is hence a possibility of fraud taking place if a dishonest user cancels a payment even before the receiver cashes out.
Since Zelle is well integrated with banks, funds are automatically transferred to the recipients’ bank account, which turns out to be great since it enables quick and secure transfer.
Another reason that makes Zelle safe and attractive to use is its ubiquity. While most payment apps require the recipient to download their app before transferring funds, this is not the case with Zelle. You do not require Zelle app to send money.
The advantages of Zelle can thus be summarized as follows:
- P2P transfer is made possible within the financial institution’s mobile banking application
- Good security, similar to other bank transactions
- Funds are transferred instantly as opposed to a few days at no additional cost
Zelle intends to capitalize on other payment platform’s weaknesses like non-instant transfer, weak security, and third-party balance transfer.