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

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Along with PayPal, Venmo and other popular mobile payment options, Zelle is a peer-to-peer (P2P) payment solution that can speed up payments between you and your friends and family or help you manage your small business payments more efficiently—all without paying any fees.

Before you start using Zelle, it helps to understand how it works so you can incorporate it into your finances.

Here’s what you need to know before you send or receive your first payment.

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What Is Zelle?

Zelle is a payments network that lets you send money easily, quickly and securely from your bank account to someone else’s bank account.

Zelle transactions typically take only a few minutes, and anyone using the platform can send and receive money fee-free.

In 2021, Zelle users sent $490 billion on 1.8 billion transactions, and nearly 3,000 financial institutions joined the Zelle network.

How Does Zelle Work?

Zelle uses the Automated Clearing House (ACH) payments system to speed payments between U.S. bank accounts. While you could initiate an ACH payment to a friend from your bank account, that transfer could take three days to process. With Zelle, your money arrives in minutes.

How to Set Up Zelle

You can access Zelle one of two ways: through your financial institution or by using Zelle directly.

How to Set Up Zelle Through Your Financial Institution

You can access Zelle through your bank’s website or mobile app. Once you’re logged in, follow the prompts to enroll your account in Zelle.

Or, depending on your bank, you may be able to enroll through Zelle’s own app using your banking username and password.

How to Set Up Zelle Directly

If your bank doesn’t offer Zelle payments, just set up Zelle directly through its mobile app. Download the Zelle app and follow the prompts to create a new username and password. Don’t worry—you won’t have to input your sensitive banking information.

How to Send Money With Zelle

Once your account is set up, it’s easy to start sending money with Zelle. It takes a few simple steps.

1. Decide Who to Pay

Zelle is best for sending payments to people you know and trust, like your friends or family. For example, if you went to dinner with friends and want to pay one of them back for your meal, you can use Zelle to send your friend $50. You can also use Zelle with certain service providers or small businesses, like babysitters, lawn care professionals and hairstylists.

2. Enter the Recipient’s Email Address or Phone Number

You can use Zelle to send money to anyone with a U.S. bank or credit union account. All you need is the email address or U.S. mobile phone number associated with their Zelle account.

3. Decide How Much to Send

Zelle will ask how much you want to send. Simply enter a figure that falls within your weekly send limit, and you’re good to go.

4. Send the Money

Once you hit “send,” your payment is on the way. If your friend or family member already uses Zelle, the money will arrive in their bank account within minutes. If they aren’t already enrolled, they’ll receive a text or email message explaining how to claim the payment.

How to Cancel a Zelle Payment

The only way to cancel a Zelle payment is if the recipient hasn’t yet enrolled in Zelle. If the recipient is already a Zelle user, the payment goes directly into their bank account and can’t be canceled.

If a payment is eligible for cancellation, log into Zelle through the app or your bank’s website. Then, navigate to your account activity page. Select the payment you want to cancel and select “Cancel this payment.”

How to Receive Money From Zelle

To receive money from Zelle, you simply need a Zelle account. If you already have an account through your bank or credit union, there’s nothing more you need to do. Any payment sent to you using Zelle will automatically be deposited into your linked bank account.

If you don’t already have a Zelle account or your financial institution doesn’t offer Zelle, you can download the app and sign up for an account. Receiving your first payment could take up to three days. Future payments, however, should arrive in your bank account within minutes.

Which Banks Use Zelle?

The list of banks that have adopted Zelle keeps growing. In 2021, Zelle reported that nearly 10,000 banks and credit unions across the U.S. were part of its payment network.

The type of banks that offer Zelle to their customers range from small local banks and digital banks to large national banks with branches throughout the country.

Who Owns Zelle?

Zelle is a product of Early Warning Services, LLC, a fintech company owned by seven of America’s largest banks: Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank and Wells Fargo. Because Zelle was created by banks for banks, its goal is to help financial institutions of all sizes offer a digital payments feature that’s good for both customers and a bank’s bottom line.

What Are the Zelle Transfer Limits?

Zelle transfer limits are set by your financial institution or Zelle directly.

To give a few examples:

  • Bank of America customers have a maximum Zelle transfer limit of $3,500 per day.
  • Chase personal checking account customers can send up to $2,000 in a single Zelle transaction and up to $2,000 per day. Higher transfer limits are available for Chase “private client” banking customers and business checking account holders.
  • Wells Fargo limits established customers to sending $3,500 in daily Zelle transfers, and it may impose a lower limit for customers who are new users.

If your financial institution doesn’t offer Zelle, you can still use the Zelle app to send up to $500 per week.

Is Zelle Safe?

Zelle is generally considered a safe, secure way to send money because Zelle transactions don’t require you to share any sensitive financial information. Also, your bank or credit union should have authentication and monitoring features to help ensure you are the person authorizing your Zelle payments.

Zelle is fast, convenient and free and works similarly to cash. But Zelle doesn’t have the same payment protections that people have come to expect from credit cards or debit cards, which generally protect consumers from fraudulent charges. For these reasons, Zelle should only be used to pay people you know and trust: friends, family and some small business owners.

Do not use Zelle to buy from online sellers or send large amounts of money to people you don’t know well. And make sure you have the correct mobile phone number or email address of the person you want to pay. This helps ensure your money will be sent to the right person.

Bottom Line

Zelle gives you the power to send and receive money fast and for free, even if you bank somewhere that doesn’t offer Zelle to its customers. With a few clicks, you can repay friends or pay your favorite hairstylist without ever having to share sensitive banking information. While there are limits on how much you can send, the money you transfer will arrive securely and in minutes—a definite plus in the world of P2P payments.

Frequently Asked Questions (FAQs)

Why is my Zelle payment pending?

A Zelle payment may be “pending” if the payment recipient hasn’t yet enrolled in Zelle. The recipient will need to use their mobile phone number or email address to set up a Zelle account and claim the payment.

Is there a way to increase my Zelle limit for sending money?

To increase your Zelle limit, reach out to your financial institution. Limits may be determined by the type of account you hold, or they may be universal for all bank customers. If your bank doesn’t offer Zelle and you’re using the app to send and receive money, your weekly send limit is $500, and there’s no way to request an increase.

Can I use Zelle for my small business, or to pay a small business?

Yes. Zelle can be a great way to get paid as a small business owner because it’s fast and there are no fees. If your customers’ payment amounts are within their daily Zelle transfer limits, you may want to encourage them to pay you via Zelle, getting money into your bank account faster than a check or ACH transfer.

However, if you’re thinking about using Zelle to pay a small business owner for products or services, keep in mind that Zelle does not offer the same payment protections as a credit card or debit card. If you are not happy with the product or if the business engages in fraudulent practices, you might not have the same chances of getting a refund for a Zelle payment. So make sure you use Zelle only with small businesses and service providers that you know and trust. If you want bigger security protection, use a credit card to make your payment.

Can I use Zelle if I don’t have a smartphone?

If your bank or credit union offers Zelle, you can use its online banking website to send or receive Zelle payments, even if you do not have a smartphone. However, if your institution does not offer Zelle, and you do not have a smartphone to download the Zelle mobile app, you will not be able to use Zelle.

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

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