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What Is Zelle and How Does It Work?

If you want to send money to a friend, Zelle is one of the easiest and cheapest ways to do it.

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As more people have shifted to a cashless way of life, mobile payment app usage has soared. Instead of withdrawing physical dollars to pay your friend for your portion of the lunch bill, apps like Venmo, CashApp and PayPal allow you to do it without pulling out your wallet. However, some mobile payment apps can come with transaction fees or lengthy waiting periods for the money to clear.

Zelle is different. Launched in 2017, the service works with most major banks and transmits payments almost instantly -- for free. And unlike other digital payment methods, you probably don’t have to download a separate app, since most banks already have Zelle in their mobile setups. 

Zelle can be a great option for sending and receiving funds between trusted sources, but it has some risks everyone should know.

Here’s what you need to know to start using it.

Read more: Best Payment Apps

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 2022, a total of 2.3 billion payments were made through Zelle, totaling $629 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, U.S. 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 tab in 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 for 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.

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. Zelle has also become a vector for criminal fraud. It’s best to use Zelle only with people and businesses you trust and deal with regularly.

How do I receive a Zelle payment?

If you bank with an institution that partners with Zelle, and you’re already registered for its mobile app, all you have to do is give the sender your phone number or email address. Once the payment is sent, it should be automatically deposited into your account.

If your bank doesn’t use Zelle, you’ll have to download the Zelle app and register first before you can access the funds. In this case, your first payment could take up to three days to appear, but future payments should be available in minutes.

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.

Zelle vs. 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 services 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 beyond that initial objective 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 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 banks in the country that offer Zelle. Loads of small community banks and credit unions use the service, too. According to Zelle, more than 80% of US consumers belong to a financial institution that partners with it, and 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 users can fall victim to scammers, just like with Venmo and PayPal. But in the first half of 2022, more than 99.9% of payments on the network were sent without any report of fraud or scams, according to the company. And Zelle says that percentage only improved through the remainder of the year. 

“The sheer volume sent through our network -- more than a trillion dollars in the past two years -- shows that consumers and businesses trust Zelle for the financial moments that matter,” Al Ko, CEO of Zelle’s parent company, Early Warning Services, said in a February 2023 statement.

Read more: Protecting Your Privacy on Payment Apps

Are there fees for using Zelle?

Though Zelle doesn’t charge any fees to send or receive funds, it’s possible for banks to 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.

Dan is a writer on CNET's How-To team. His byline has appeared in Newsweek, NBC News, The New York Times, Architectural Digest, The Daily Mail and elsewhere. He is a crossword junkie and is interested in the intersection of tech and marginalized communities.
David McMillin writes about credit cards, mortgages, banking, taxes and travel. Based in Chicago, he writes with one objective in mind: Help readers figure out how to save more and stress less. He is also a musician, which means he has spent a lot of time worrying about money. He applies the lessons he's learned from that financial balancing act to offer practical advice for personal spending decisions.
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