Zelle is an electronic peer-to-peer payment system introduced in 2016 as a way for customers to send money to each other. The goal was to make it easy to send small amounts of money without fees. The key feature was that it doesn’t rely on any specific bank. In other words it is bank agnostic. Since founding banks were big and there were many of them, the start was easy. If you ask, Does US bank have Zelle? Yes. It is a big bank that surely implemented it. Does Capital One have Zelle? Yes, it was the founding bank. Does Chase have Zelle? Of course! The same can be said about Bank of America, PNC Bank, and Wells Fargo.
The main competitors of the new payment system are Venmo, Cash App, and PayPal. However, the weak point of Venmo is that it lacks integration with big banks and charges a fee. Cash App and PayPal have some cons too. Customers have to wait till money become available on their balance. It can easily take 2 business days or customer has to pay a fee.
Today Zelle network is adopted by more than 1,000 banks and credit unions. That means majority of users are already integrated and there is no need to add another middle man that is going to charge a fee.
Some banks have limits on Zelle transfers. For example, Wells Fargo has limits on how much you can send through Zelle. Other banks impose limits on the amount of money your can send.
Zelle is not like a credit card payment. There is no way to cancel payment unless it is still pending. So you have to be careful when you send money. All transfers are final!
How scammers use Zelle?
Scammers found that new payment system allows them to steal money. The most common way is to steal phone number or email that is used to route payments. Then they receive money instead of the victim. However, unlike credit card, Zelle has no zero liability policy and bank is not required to reimburse the lost money.