What Is Zelle and How Does It Work? (2024)

Sending money to someone used to be a pain. You had to wait for a few days for a payment to clear, pay hefty wire transfer fees, send a check via snail mail or find an ATM to withdraw cash and hand it over in person. Thankfully, those challenges are fading away thanks to digital payment apps like Venmo, CashApp and Zelle.

Zelle is one of the newer kids on the banking block. The service has only been around for the past seven years, but it’s quickly becoming the go-to option for sending and receiving money. If someone you know says, “Just Zelle me” the next time you need to split a bill, here’s a rundown of what it means and how it works.

What is Zelle?

Zelle is a peer-to-peer payment system that allows individuals and businesses to send money directly to other bank accounts. In 2023, a total of 2.9 billion payments were made through Zelle, totaling $806 billion.

The app is owned by Early Warning Services, a partnership between seven major US financial institutions: Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, US Bank and Wells Fargo. Payments sent through Zelle are transmitted through the Automated Clearing House, or ACH, the chief electronic fund transfer system in the US.

How does Zelle work?

Zelle offers simple person-to-person payments. Instead of requiring you to input lengthy account or routing numbers, the service facilitates payment by relying on using the contact information associated with the bank account, either an email address or a phone number.

How to set up Zelle

To set up Zelle, start by figuring out if your bank is part of the network. If it is, simply open your mobile banking app or go to your bank’s online banking portal, and set up an account. You’ll need to link your Zelle account to your email address or your phone number.

If your bank isn’t part of the Zelle network yet, you can still use the service. You’ll need to download the official Zelle app and link your account to your phone number and a Visa or Mastercard debit card.

How to use Zelle

• Find the Zelle tabin your mobile banking app or open the Zelle app. Add the email address or US telephone number of the person or business you want to send funds to. Be sure to double-check that their information is correct before proceeding.

• Select the amount to send. Each bank determines how much its customers can send through Zelle. Bank of America, for example, limits customers to a maximum of 10 Zelle transfers in a 24-hour period, totaling $3,500 in transfers a day for individuals. If your bank or credit union does not offer Zelle, the limit you can send via the Zelle app is $500 a week, and the limit you can receive is $5,000 per week.

• Send the money. If your recipient’s bank is already partnered with Zelle, the money will go straight into their account. If their bank doesn’t use Zelle, they’ll receive a notification explaining how to access the money.

How do I receive a Zelle payment?

Can I cancel a Zelle payment?

Zelle transactions begin immediately after you hit “send” and typically cannot be canceled. The only exception is if the recipient hasn’t signed up for Zelle yet. In that case, you may be able to select “cancel this payment” on your account activity page.

If you accidentally send money to the wrong email or phone number, you typically won’t be able to get it back. That’s why it’s important that you verify this information before finalizing your transfer. It’s also best to use Zelle only with people and businesses you trust and deal with regularly.

Zelle versus other payment apps

If you’re simply trying to transfer money to another person in the US, Zelle’s promise of being fast and free is tough to beat. However, these three other popular payment apps offer additional services that may be useful for your money management needs.

Venmo: If you want to move your money instantly with Venmo, there is a 1.75% transfer fee with a maximum of $25. Standard and free processing times are one to three days. So, Zelle definitely wins in this category. However, while Zelle is solely rooted in peer-to-peer payments, Venmo has expanded to become a payment method for shopping, too. The company now offers a Venmo debit card and a Venmo cash-back rewards credit card.

Cash App: Cash App doesn’t charge any fees for sending or receiving money. One advantage of Cash App over Zelle is that Cash App allows fee-free international transfers, while Zelle only works with US phone numbers. The big difference with Cash App is that it wants to be your everything else, too. The company offers banking services linked with FDIC-insured Sutton Bank, along with a range of other services like buying stocks and crypto.

Paypal: PayPal doesn’t charge fees for domestic person-to-person transactions that are linked to a bank account, but you will pay fees for moving money linked to a credit card. However, moving that money from your PayPal account to your bank account can come with a fee of 1.75% if you need the cash instantly. Otherwise, standard transfers -- which can take up to three days -- are free. You can also move money internationally with PayPal, but there is a 5% fee.

Which banks use Zelle?

It’s not just the big US banks that offer Zelle. Loads of small community banks and credit unions use the service, too. According to Zelle, more than 2,100 banks and credit unions offer Zelle in their mobile apps.

If your financial institution doesn’t use Zelle, you can download the app and pair it with an eligible Visa or Mastercard debit card. However, at least one person in the transaction must have a bank in the Zelle network in order to send or receive money.

Is Zelle safe?

Zelle has its fair share of scammers, just like Venmo and PayPal. But the company has been taking steps to safeguard users, and in 2023, a tiny fraction of transactions were fraud or scams, less than one-tenth of 1%. When you use Zelle to send money, you’ll often see a notice to only send funds to someone you know and trust, a reminder from your bank or credit union to proceed with caution because most Zelle transactions cannot be canceled. If you send cash to the wrong person, it’ll be a struggle to get it back.

Are there fees for using Zelle?

Though Zelle doesn’t charge fees to send or receive funds, banks may set their own fees. The company recommends confirming with your bank or credit union that it doesn’t charge anything for Zelle transactions.

Editors’ note: An earlier version of this article was assisted by an AI engine. This version has been substantially updated by a staff writer.