What Is Zelle? And How Does It Work?

Written by Justin EstesUpdated: 29th Sep 2021
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As the world goes to a more digital form of money, people are starting to rely less and less on cash.

In fact, most payments you will make are going to use a credit card or some other digital means.

Because of this, people are looking for a reliable, cash-less method to send and receive money.

When choosing a service to digitally transfer your money, Zelle may be a great choice. Zelle is a notable money transferring utility because of its low cost and range of benefits.

Also, as the service is widely used throughout numerous traditional banks and online banks, you can trust that Zelle is a credible method to safely transfer your money.

However, Zelle has some limitations, such as sending money in the United States. So, before you decide on using Zelle, you should understand all the details to choose the right option.

What Is Zelle?

Zelle is a costless peer-to-peer payment service. Zelle allows you to instantly transfer money with people through your connected bank accounts.

Zelle is unique from other money-sending services because it has exclusive partnerships directly with banks, making transfers instant and affordable.

How Does Zelle Work?

Zella acts as a convenient and quick method to transfer money with other people. To send money, all you need is the recipient’s email address or phone number.

Once you have their information, you can enter the desired amount and instantly transfer money with other people without cost.

However, when sending money, you must trust the recipient and have their correct information.

If you send money to the wrong person or do not provide what you paid for, your bank is not responsible for your reimbursement.

Because of this, it is imperative to be cautious when sending money and only make transfers with people you trust.

Zelle Features and Benefits

Not only is Zelle a convenient and cost-effective money transferring service, but it also comes with some benefits.

Easily Send & Receive Money

With Zelle, neither party is required to provide their bank information when transferring money.

All you need is a phone number or email address to instantly send or receive money. Unlike other services, Zelle does not charge you for their instant money transferring.

Compatible with Multiple Banks & Credit Unions

One of the many perks with Zelle is the large variety of partner banks and credit unions. This allows you to easily send money to a friend with a different bank account.

However, if you or the other person’s bank or credit union doesn’t use Zelle, you always send money via the Zelle app.

With their app, you can connect your debit card and send money without worrying about supported banks.

Secure Money Transfers

Because Zelle doesn’t store any of your personal information, it is widely accepted as a secure money transfer method. All of your account details are safe with your bank and are never visible on Zelle.

Fast Money Transfers

Users find Zelle to be extremely convenient because of its quick money transferring system. Usually, people who are enrolled with Zelle can expect to receive a money transfer in minutes.

Zero Fees

Zelle is free to download, and unlike other payment service options, it will not charge you anything to send or receive money.

Things to Watch Out for When Using Zelle

Although Zelle has plenty of alluring features, it is not a perfect system. There are some limited functionalities and components to be aware of before signing up with their service:

No Fraud Protection

When sending money through Zelle, you must trust the recipient and have their correct information.

If you happen to send money to the wrong person or the product you paid for isn’t provided, you will not be reimbursed.

Zelle does not protect buyers or sellers; in fact, it recommends you to only transfer money with those you trust.

It is essential to be wary of potential Zelle scams, so avoid Zelle transactions with strangers.

Only U.S. Bank Accounts Supported

If you need to transfer money to countries outside the United States, Zelle may not work for you. Zelle only supports U.S.-based credit unions and banks, unlike other services like Xoom and PayPal.

Canceling Transfers is Hard and a Hassle

If you find yourself in a situation where you sent the wrong person some money, you will find it difficult to cancel that payment.

If the recipient is not yet enrolled with a Zelle account, you are still able to cancel the payment.

However, if the recipient already has a Zelle account, you will not be able to cancel your payment.

This is why it’s important to understand the recipient’s account details and why it’s advised to only send money to people you know with Zelle.

Zelle Pros and Cons


  • No fees
  • Quick and efficient money transferring
  • Supported by many banks
  • No receiving limits
  • Secure transactions


  • No fraud protection
  • Lack of credit card money transferring
  • U.S. banks are only supported
  • Unable to cancel particular payments
  • Payment limits

How Does Zelle Compare to Other Services?

Although Zelle is a solid option for money transferring, there are various other services to choose from. Each offers its own set of features, so you should understand them to see your best choice.

#1. Zelle vs. TransferWise

Wise (formerly TransferWise) is one of the leading services for sending money internationally. Sending money abroad often requires bank logistics, wire fees, and a convoluted and time-consuming process.

Wise enables its users to send money to over 80 countries with a great deal of flexibility. You can link a credit card, debit card, or bank account and send money to someone as long as the recipient has a bank account.

Wise charges a flat fee plus a small percentage of the overall transfer, which is usually much cheaper than an international wire fee.

In contrast, Zelle is a free bank-to-bank money transferring service that only operates domestically in the U.S. US-based consumers can most likely take advantage of both services because they are so different.

Since Zelle only services the United States, anyone who needs to send money to someone in another country will have to choose another option, and Wise is one of the best services to send money internationally.

#2. Zelle vs. Venmo

Venmo is a notable alternative for money transfers. A feature that many people enjoy with Venmo instead of Zelle is sending money via a credit card.

There is a 3% fee, however, but this option can be helpful. Unlike Zelle, your information with Venmo may not be completely private.

This is because your default setting when transferring money is set to public. This means that other people will be able to see your transaction details until you set it too private.

Zelle also allows you to instantly send and receive money directly into your bank account, whereas Venmo requires you to make a deposit which could take up to a day.

Recently, Venmo also began enabling its users to buy and sell cryptocurrency, making it a more robust personal finance platform.

#3. PayPal vs. Zelle

As one of the first digital peer-to-peer transaction services, PayPal is a potentially good option. Similar to Zelle, there are no fees when transferring money with other people.

However, PayPal does allow you to purchase goods and services, unlike Zelle. Both services are good, however, you may find that PayPal is a safer option, but if you are careful when you send your money, then that shouldn’t be an issue.

PayPal also offers a much more in-depth business service that helps business owners track invoices and track their payments.

#4. Apple Pay vs. Zelle

Apple Pay is a great option for those with an Apple mobile device. As the FDIC covers it, your money is federally insured up to $250,000 with Apple Pay.

When transferring money with Apple pay, all the money goes into your Apple Cash account, which can then be transferred to your bank account.

Unlike Zelle, this process can take up to three days, where you can instantly transfer money directly to the recipient’s bank account.

Apple Pay is good for those with an iOS device, but if you prefer instant transfer times or don’t have an iOS device, Zelle might be the best choice.

#5. Google Pay vs. Zelle

If you have an Android device, then you will find Google Pay as the default transaction system.

Although it isn’t as popular as some other methods, Google Payprovides an easy way for Android users to transfer money with friends and family without a fee.

However, because it is strictly Android-specific, you are unable to use Google Pay with an iOS device.

Because of this, you may not even be able to use Google Pay; therefore, Zelle would be the better option. Overall, both services offer similar features, so you should just choose the one that fits you best.

Frequently Asked Questions

Is Zelle Safe to Use?

Yes – Zelle is safe to use as long as you transfer money with people you trust. Zelle will not reimburse any money sent to the wrong person. Overall, as long as you are careful with who you send money to, Zelle is a completely safe service to use.

Does Zelle Cost Any Money to Use?

No – Zelle is a completely free service to use. There are no annual, monthly, or service fees you need to worry about. However, it is always safe to check that your bank doesn’t charge any money service fees.

Do You Need a Bank Account for Zelle?

Yes – Zelle requires both parties to have a bank account. This is because Zelle allows you to directly send money to other people’s bank accounts, saving you the trouble of having to make deposits.

Bottom Line: What Is Zelle?

As many peer-to-peer payment options as there are, Zelle may be one of the best. It offers a wide range of benefits while also being completely free to use.

Zelle does have some drawbacks, however. You are not able to send money via a credit card whatsoever.

This means that any money sent has to come directly from your bank account. And if you do not have a lot of liquid funds in your balance, then that could be an issue.

Zelle also doesn’t allow you to send money outside the United States, so if you have family or friends abroad who need some cash, you will have to use another money transferring service.

Overall, Zelle is a great option for those in the U.S. who need to send money to friends or family. Zelle is a great option for you to transfer money with zero cost and a diverse selection of supported banks.

Justin Estes
Justin Estes

Justin Estes is a Senior Personal Finance Writer who is a recognized small business accountant, consultant, and credit card expert. His background in accounting and finance led to a passion for helping people make the most of their money and matching them with financial products that enhance their lifestyle. Justin attended Charleston Southern University where he double-majored in Finance and Accounting. Justin’s areas of expertise are credit cards, small business finance, accounting, and taxes.