Zelle vs Venmo
Posted by Checkbook on Sep 04, 2024
How Does Zelle Work?
Launched in 2017 and owned by Early Warning Services, LLC, a consortium of major U.S. banks, Zelle integrates directly into numerous bank apps and websites. This integration facilitates rapid and straightforward bank-to-bank transfers.
How Does Venmo Work?
Venmo, established in 2009 and acquired by PayPal in 2013, links directly to bank accounts or debit cards for sending and receiving money. Renowned for its social feed feature, Venmo allows users to share transactions with friends. It has evolved into a leading payment app in the U.S., celebrated for its social interaction capabilities.
| Key Features | Zelle | Venmo |
|---|---|---|
| Transfer Type | Direct bank-to-bank transfers | Peer-to-peer payments, through linked bank accounts and a wallet that allows the user to hold balance in the wallet |
| App Requirement | Integrated into many bank apps; Checkbook provides and API for businesses looking to disburse payments using Zelle | Standalone app. Checkbook provides and API for businesses looking to disburse payments using Venmo |
| Transfer Speed | Instant in most cases | Also instant |
| Social Features | No social feed or public transactions | Social feed for sharing transactions (can be made private) |
| Account Balance | Not applicable | Option to hold a balance in the app/wallet in the wallet |
| Security | Strong, through bank integration but Payor responsible for all transactions | Generally considered secure and Payor may have some recourse in case of a mis-directed payment |
| Popular Use | Focused on fast transactions | Known for social interactions and ease of use |
| Best For | Instant transfers | Social interaction and faster payments with ability to hold balance in wallet |
Frequently Asked Questions
When should you not use Venmo?
You should avoid using Venmo when transacting with unfamiliar individuals, especially when the transaction involves buying or selling goods or services. These transactions bear high risk, and you may end up losing your money without receiving the intended goods or service.
Why is Zelle so popular?
Zelle's popularity stems from its broad accessibility to anyone with a bank account at participating financial institutions. This feature has made it an attractive option for banks eager to compete in the digital transaction space and thus effectively coerce their users into using Zelle
What banks don't support Zelle?
Notable financial institutions that don't directly participate in the Zelle network include Alliant Credit Union, American Express, Barclays, Connexus Credit Union, LendingClub Bank, Marcus by Goldman Sachs, Pentagon Federal Credit Union, SoFi, and Synchrony Bank.
Is Zelle a Wire Transfer?
Read more about the similarities and distinctions between Zelle and a Wire Transfer here.
What is Zelle?
Understand Zelle as a payment rail in detail here.
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