Zelle (payment service)

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Industrypayment service
payment network
mobile app
Serviceselectronic funds transfer

Zelle is a United States–based digital payments network owned by Early Warning Services, a private financial services company owned by the banks Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank and Wells Fargo.[1][2][3] The Zelle service enables individuals to electronically transfer money from their bank account to another registered user's bank account (within the United States) using a mobile device or the website of a participating banking institution.[1][3]

The Zelle instant payment service was launched in June 2017.[1] Previously, the Zelle service was known as clearXchange, which offered payment services through member financial institutions and a website. Launched in April 2011, clearXchange was originally owned by Bank of America, JPMorgan Chase, and Wells Fargo. After Capital One and US Bank joined as additional partners, clearXchange was sold to Early Warning Services in January 2016.[4] In December 2017, all clearXchange accounts for person-to-person payment services were rebranded as "Zelle", and clearXchange users began being required to recreate their profiles in Zelle to continue using the service.


  • In April 2011, the clearXchange service was launched. It was originally owned and operated by Bank of America, JPMorgan Chase, and Wells Fargo.[5][6] The service offered person-to-person (P2P), business-to-consumer (B2C), and government-to-consumer (G2C) payments.[7]
  • For person-to-person payments, clearXchange enabled users to send money to other registered users having accounts at participating banks in the United States. Users accessed the network within the websites and apps of member financial institutions,[5] and through clearXchange's website. The network connected with existing bank accounts, so consumers would not need to fund a separate account to use the service.[6] This feature and the lack of fees for using the service were highlighted as advantages for competition with other person-to-person payment services such as PayPal, Popmoney, and Square.[5][6] The system associated each user bank account with an email address and mobile phone number, so only the recipient's email address or mobile number was needed to send money directly from a bank account to the bank account of another person who had signed up for the service.[8][9][10]
  • Over time, the number of financial institutions that were affiliated with clearXchange grew to include various other banks and credit unions. Capital One and US Bank were added as additional owner-members.[9][10]
  • In June 2015, clearXchange announced the availability of a real-time payment system.[11][12] However, some transactions could take as much as five days or longer to be completed.[13]
  • In January 2016, clearXchange was sold to Early Warning Services.[14] Early Warning Services is owned by Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, US Bank, and Wells Fargo.[2]
  • In September 2017, Early Warning Services released the Zelle payment system and mobile app[15] and announced that all clearXchange "person-to-person" payment service accounts would be deactivated in December 2017. After that, clearXchange stopped supporting person-to-person payments but has continued to provide payments from companies and government entities to certain customers. The company encouraged the former users of clearXchange to sign up for the new Zelle service.[16] As in the former clearXchange service, payees are identified in the Zelle service by an association between the recipient's bank account and an email address or mobile phone number.[16] Money sent to a registered payee who has an account at a financial institution that is a member of the Zelle network is typically available to the recipient "within minutes".[17]
  • In March of 2019, Early Warning Services's CEO, Paul Finch, who launched the Zelle Network stepped down as acting CEO. Finch's desire to step down was a result in directing a nonprofit organization, the Finch family Foundation, in Phoenix, Arizona to aid deprived families and adolescents. While Paul Finch was the active CEO, in 2017 the Zelle Network had more than $75 billion worth of payments.[18]
  • In May of 2019, Early Warning Services appointed their new CEO, Albert Ko. Before Mr. Ko became the new CEO, he was originally the chief transformation officer for Intuit. While being an officer for Intuit, Albert Ko was the general manager for Mint, as well as, an oversaw for QuickBooks.[19]

The Zelle service[edit]

The Zelle service is intended for payments to those whom the payer already knows and trusts adequately, and the service disclaims any responsibility for goods and services sold through the system[20][21].

Zelle users can send money to other registered Zelle users. (They can also attempt to send money to unregistered recipients, in which case the intended recipient will receive an invitation to sign up for the service in order to complete the transaction.) Users access the network within the websites and apps of Zelle-participating U.S. financial institutions[5] and through the Zelle mobile app. To register with the Zelle mobile app, users must enroll a supported MasterCard or Visa-branded debit card issued in connection with a U.S. bank account[22].

The network connects with existing bank accounts, so consumers do not need to fund a separate account to use the service.[6] Only the recipient's email address or mobile number is needed for a user to send money directly from their bank account to the recipient's bank account.[8]

Each email address or mobile phone number may only be actively enrolled in Zelle to receive payments at one financial institution. To register at multiple banks, users need to provide different email addresses or mobile phone numbers for each.[23]

In addition to being able to transfer money to a recipient, Zelle users can also submit requests for others to send them a payment or to split the cost of a payment with them.[24][25]

There are limits on the dollar amount and frequency of transactions allowed on Zelle that are imposed by the banking institution associated with the account being used.[20] For example, transfers from a Wells Fargo funding account are limited to $2,500 per day and $4,000 in a 30-day period, and lower limits apply when using the Zelle mobile app rather than the bank's self-operated services.[20][26] Transfers from a Chase checking account are limited to $2,000 per day and $16,000 per calendar month.[20][27]

Payments made using Zelle cannot be canceled (unless an attempt was made to send a payment to someone who has not enrolled in the service).[28]

The website for Zelle that was launched in June 2017 says that "Transactions between enrolled Zelle users typically occur in minutes. If your recipient is not yet enrolled with Zelle, it may take between 1 and 3 business days after they enroll."[15]

Competition with PayPal's Venmo service[edit]

Zelle's online payment competitors

The Zelle service's principal competitor is PayPal and its Venmo payment service.[1][29] Venmo is more popular, based on public awareness, opinion polling, and active engagement with users, but Zelle processes a much larger dollar volume of money transfers -- reportedly US$75 billion in its first year, 2017.[1][3][21][25][30][31][32]

The two services work very similarly from the user's perspective – e.g., both services use email addresses and mobile phone numbers to identify recipients, but Venmo lacks the direct integration with banking institutions that Zelle has, and Zelle money transfers are typically processed more quickly.[25]

Starting in January 2018, Venmo began to also offer a more rapid transfer option than its typical 1–3 day transfer service, but Venmo charges a fee for the service, while Zelle-affiliated banks currently do not.[33][34]

The Zelle network itself does not charge users a fee for money transfers.[35] Banks are allowed to charge a fee for Zelle transfers involving their accounts, but they have generally not chosen to do so.[20][33]

Venmo requires its users to set up an account in its system that is separate from an ordinary banking account and is not insured by FDIC or NCUA, which banking accounts are.[25] The Venmo account can be linked to a bank account so that necessary funds will be automatically withdrawn from there. However, funds can only be withdrawn from a Venmo account by first transferring them to a bank account and then withdrawing the money from the bank account (a process that adds an extra step and involves some additional delay and possibly a fee). In contrast, Zelle transfers money directly between bank accounts, so it requires no separate account or extra steps to obtain access to funds. Zelle is also accessible through banking institution websites and apps as well as through the separate Zelle mobile app.

It is not possible to cancel a payment to an existing Venmo account unless the recipient gives their explicit permission. Once you send a payment, the funds are available to the recipient right away. The only exception is if payment is sent to a phone number or email address that has not been registered with a Venmo account. [36] Like Venmo, Zelle payments to a registered user cannot be canceled.


The Zelle Network includes more than 100 participants, including the network partners MasterCard and Visa; the processor partners CO-OP Financial Services, FIS, Fiserv, and Jack Henry & Associates; and numerous financial institutions.[37] Zelle is currently in the process of establishing more banks and credit unions into their network. They have officially partnered with institutions such as Bank of Hawaii, Comerica Bank, Morgan Stanley, and M&T Bank. However, even though they are partnered with the Zelle Network, they have not officially launched these institutions for users to use.[38]


The Zelle service has received publicity for numerous account security and fraud incidents in which users' accounts were compromised, or created without authorization, enabling payments to be intercepted or fraudulently redirected. The instant funds transfer, and the lack of default two-factor authentication, and use of identification through easily co-opted phone numbers or e-mail addresses, leave users vulnerable to deceptive misdirection of funds, or money instantly lost in a fraudulent or erroneous transaction, with essentially no practical or legal recourse for the victim. In some cases, bank customers have had their bank accounts wiped out without even knowing that there was a Zelle service associated with the account. While some Zelle fraud is compensated by the banks involved, some is not, depending upon the bank and its policies, and the specifics of the incident.[1][39][40][3][21][41][42]


  1. ^ a b c d e f "Zelle, the Banks' Answer to Venmo, Proves Vulnerable to Fraud", April 22, 2018, The New York Times, retrieved February 10, 2020
  2. ^ a b "Early Warning Corporate Overview" (PDF). Early Warning Services official website. Retrieved January 12, 2018.
  3. ^ a b c d Mangla, Ismat, "Here’s What You Need to Know About Zelle, the Mobile Payment App That Rivals Venmo", March 5, 2018, Ask Experian, Experian Information Solutions, Inc., retrieved February 10, 2020
  4. ^ Sidel, Robin (May 25, 2011). "Big Banks Join Battle for Online Payments". The Wall Street Journal. Retrieved 1 August 2015.
  5. ^ a b c d Smith, Aaron (May 25, 2011). "New cash transfer service rivals PayPal". CNN Money. Retrieved 29 July 2015.
  6. ^ a b c d Salmon, Felix (May 25, 2011). "Why clearXchange is great for payments". Reuters. Retrieved 29 July 2015.
  7. ^ Heun, David (July 15, 2015). "clearXchange: We Have the Answer to Real-Time Payments,". Payments Source. Retrieved 29 July 2015.
  8. ^ a b Bernard, Tara Siegel (May 25, 2011). "Person-to-Person Payments Get Easier at Big Banks". The New York Times. Retrieved 29 July 2015.
  9. ^ a b "US Bank Latest Owner-Member of clearXchange". PYMNTS.com. March 17, 2015. Retrieved 1 August 2015.
  10. ^ a b "clearXchange rolls out real-time payments". PYMNTS.com. June 15, 2015. Retrieved 1 August 2015.
  11. ^ Bakker, Evan (June 21, 2015). "Here's What Happened in Payments this Week". Business Insider. Retrieved 29 July 2015.
  12. ^ Heun, David (June 15, 2015). "Bank Consortium clearXchange Debuts Real-Time Payments". American Banker. Retrieved 29 July 2015.
  13. ^ "FAQ". clearXchange. Archived from the original on June 6, 2017. Retrieved June 13, 2017.
  14. ^ "Early Warning Completes Acquisition of clearXchange". clearXchange. Retrieved 2017-01-27.
  15. ^ a b "Zelle official website". Retrieved June 11, 2017.
  16. ^ a b "The Zelle App is Live!". Early Warning Services official website (Press release). September 12, 2017. Retrieved 13 November 2017.
  17. ^ "How long does it take to receive with Zelle?". Zelle. Retrieved 28 November 2017.
  18. ^ "Zelle founder Paul Finch to step down". American Banker. 2018-05-17. Retrieved 2020-11-16.
  19. ^ "Zelle operator Early Warning hires new CEO". American Banker. 2019-05-30. Retrieved 2020-11-16.
  20. ^ a b c d e Bodine, Alicia (February 1, 2018). "Zelle Review: Free and Easy Money Transfers". Go Banking Rates. Retrieved February 1, 2018.
  21. ^ a b c Perez, Sarah, "Zelle users are finding out the hard way there’s no fraud protection" February 16, 2018, TechCrunch, retrieved February 10, 2020
  22. ^ "How do I get started?". Zelle. Retrieved 14 November 2017.
  23. ^ "When trying to enroll with Zelle, I received a message saying that I was already enrolled. Why?". Zelle. Retrieved 14 November 2017.
  24. ^ Chatzky, Jean (October–November 2017). "Digital Wallets Are Here to Stay". AARP. Retrieved February 1, 2017.
  25. ^ a b c d Lyons Cole, Lauren (January 1, 2018). "Apple Pay Cash won't be the death of Venmo – but I found the little-known alternative that will". Business Insider. Retrieved February 1, 2018.
  26. ^ "Zelle Transfer Service Addendum to Wells Fargo Online Access Agreement". Wells Fargo official website. July 25, 2017. Retrieved February 1, 2018.
  27. ^ "Chase QuickPay with Zelle Service Agreement and Privacy Notice". Chase Bank official website. November 12, 2017. Retrieved February 2, 2018.
  28. ^ "Can I cancel a payment?". Zelle official website. Retrieved February 1, 2018.
  29. ^ Sidel, Robin, "America’s Biggest Banks Have a New Name for Their Venmo-Killer: Zelle; Banks plan to launch reinvigorated person-to-person payment service in October," Updated Aug. 24, 2016, Wall Street Journal, retrieved February 11, 2020
  30. ^ Noto, Grace (February 1, 2018). "With Zelle Volume Growing, is PayPal Still King of P2P? (Yes.)". Bank Innovation. Retrieved February 1, 2018.
  31. ^ Wylie, Melissa (February 1, 2018). "Banks spend big to promote Zelle to millennials". New York Business Journal. Retrieved February 1, 2018.
  32. ^ Stewart, John (January 31, 2018). "Bank-Owned Zelle Puts Venmo's Millennial Enthusiasts Squarely in Its Cross-Hairs". Digital Transactions. Retrieved February 1, 2018.
  33. ^ a b Kulkarni, Tatjana (February 1, 2018). "Venmo Introduces Fee for Realtime Transfers". Bank Innovation. Retrieved February 1, 2018.
  34. ^ Lefevre, Rob (January 26, 2018). "Venmo's 25-cent instant transfers are now available for everyone". Engadget. Retrieved February 1, 2018.
  35. ^ "Are there any fees to send money using Zelle?". Zelle official website. Retrieved February 1, 2018.
  36. ^ "Cancel Payment". Venmo. Retrieved 2020-11-15.
  37. ^ "Participant financial institutions". Zelle official website.
  38. ^ "Participating Banks and Credit Unions | Zelle". www.zellepay.com. Retrieved 2020-11-16.
  39. ^ "Instant fraud: Consumers see funds disappear in Zelle account scam; The digital payment service embedded in banking apps has made it easier for thieves to access funds in personal checking and savings accounts, experts say," June 11, 2019, NBC News, retrieved February 15, 2020
  40. ^ Sullivan, Bob (fraud researcher), "Zelle Fraudsters Find New Victim Pool: Consumers Who Don’t Even Use Zelle," April 23, 2019, Yahoo! Finance, (which notes: "criminals have [apparently discovered] a way to open Zelle accounts [which are] attached to [bank customers'] existing bank accounts... [to] send money to themselves.") retrieved February 15, 2020
  41. ^ "Early Warning: Complaints: Better Business Bureau® Profile," (222 complaints, several with Zelle corporate responses, last one dated Sept. 11, 2019), Better Business Bureau, retrieved February 11, 2020
  42. ^ "How scammers use Zelle to drain your bank account; Two Cincinnati professionals fall for slick scam," October 18, 2019, WCPO (Cincinnati, Ohio), Scripps Media, Inc., (also at: "Scary bank scam uses Zelle to drain your account; New money transfer app lets scammers pull out money," Oct 30, 2019, The Denver Channel), retrieved February 15, 2020

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