What Is Zelle? How It Works and Example

Zelle is a peer-to-peer money transfer app that allows users to move funds from one bank account to another. It’s among a growing number of mobile payments apps that allow you to pay another person with the click of a button, even if they have an account at a different bank.

Unlike competitors such as Venmo, PayPal, and Cash App, Zelle does not charge an extra fee for an instant transfer.

Learn more about how Zelle works and its advantages and disadvantages.

Key Takeaways

Zelle is a money transfer app that allows you to send money to family or friends quickly.
More than 1,700 banks include Zelle in their banking app.
Unlike many money transfer apps, Zelle does not charge a fee for instant transfers.
Zelle transfers are generally secure, but the app does carry risks, including the risk of glitches at banks that can affect money transfers.

How Zelle Works

Zelle is a money transfer app that helps you quickly send money to family or friends through your mobile device. More than 1,700 banking apps already offer Zelle.

You enroll through the Zelle app or through your banking app, if it offers Zelle’s service. Then, you can find a person whom you want to pay by entering their email address or phone number. Finally, choose the amount of money you want to send, and the recipient will get instructions on how to receive the payment quickly.

Zelle is owned by Early Warning Services, a financial technology (fintech) owned by seven major banks: Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank, and Wells Fargo. It launched in 2017 to compete with the likes of PayPal and Venmo, both of which are owned by PayPal Holdings Inc. (PYPL), and Cash App, owned by Block Inc. (SQ).

The amount of money you can transfer will depend on the transfer limit of your bank account. If your bank does not provide Zelle’s service, the weekly transfer limit is $500 and you cannot request an increase.

Example of How Zelle Works

Zelle works similarly to other mobile payment apps. For example, if you went out to a restaurant with a group of friends and wanted to split the bill, one friend could pay. You and your other friends could use Zelle to send your share of the bill to the person who paid.

Instead of receiving cash, your paying friend would receive money directly deposited in their bank account. With Zelle, they would receive the funds within minutes and would not have to wait a few days for the payment to process.

Advantages and Disadvantages of Zelle

Zelle’s benefits include providing a convenient way to transfer money within minutes for no fee. Mobile payment services reduce the need to carry cash, which can lower the risk that your money will be stolen.

However, Zelle does have some downsides to keep in mind. For one, even though Zelle is generally safe—it uses authentication and monitoring features to protect your funds—users have experienced trouble with transfers, such as from a bank outage. Also, if a transaction goes wrong, Zelle currently does not provide the payment protection that credit cards typically do.

Is Zelle Safer Than Venmo?

Zelle and Venmo are both generally safe money transfer apps, as they use authentication, encryption, and monitoring features to make transfers secure.

What Are the Disadvantages of Using Zelle?

Disadvantages of using Zelle include the potential for fraud or theft. Users can also face difficulties, such as not receiving their funds if the app or banks experience technical problems. Outages can affect money transfers. You also cannot cancel a payment that’s received by another user, and transfers occur quickly.

Do You Need a Bank Account for Zelle?

You need to have a U.S. bank account to use Zelle. A recipient also needs to have a U.S. bank account, but it does not have to be with the same bank as the sender’s account.

Does Zelle Charge a Fee?

Zelle does not charge a fee for sending or receiving funds. Some banks or credit unions may charge for this service. You should confirm with your financial institution whether or not it charges for Zelle’s service.

The Bottom Line

Zelle can provide a fast and convenient way to send money to another person, no matter which bank they use. Unlike many of its competitors, Zelle provides instant money transfers with no fees, so you can send and receive funds more quickly.

However, like with any technology, Zelle users could potentially encounter glitches from the app or banks that can affect their payments. Weigh the pros and cons, including any associated fees, before using any money transfer app.

Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

Zelle. “What’s Zelle®? Glad You Asked!”
Consumer Financial Protection Bureau. “Early Warning Services.”
Zelle. “Zelle® Now Live! In Mobile Banking Apps Today, a New Way to Pay.”
Zelle. “Is There a Limit to How Much Money I Can Send?”
Zelle. “Are There Any Fees to Send Money Using Zelle®?”
Zelle. “Is My Information Secure?”
Bloomberg. “Zelle, Bank of America Outages Have Users Worried.”
Zelle. “I’m Unsure About Using Zelle® to Pay Someone I Don’t Know. What Should I Do?”
Venmo Help Center. “Security.”
Zelle. “Report a Scam.”
Zelle. “Can I Cancel a Payment?”
Zelle. “Someone Sent Me Money with Zelle®, How Do I Receive It?”
Zelle. “What If the Person I’m Sending Money to Hasn’t Enrolled with Zelle®?”

Open a New Bank Account Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Open a New Bank Account Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.