5 Things to Know Before You Use Zelle

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Payment apps that allow people to send and receive money with a few taps on their smartphones have exploded over the last several years. Among the more popular ones is Zelle.

Zelle is a money-transfer app that sends cash almost instantly. And what makes Zelle stand out from other payment apps is that it is integrated in many banking apps.

You may be wondering if that’s a good thing, or how Zelle really works. In this article, we’re going to go over what the app does well and not so well and how to protect yourself if you use it. Let’s get started…

1. What Is Zelle?

Zelle is a payment app run by Early Warning Systems LLC, a financial services consortium that is actually owned by a group of big banks.

The good thing is that Zelle itself doesn’t charge a fee to send or receive money. The banks and credit unions that use Zelle may have fees, though. You’ll have to check with your banking institution.

The bad thing about Zelle is that there’s no way to cancel a payment to another user. That means if you send money to the wrong person, get hacked or your phone is stolen, you may be in big trouble!

Here’s what it says on Zelle’s website: “If your recipient has already enrolled with Zelle, the money is sent directly to your recipient’s bank account and cannot be canceled.”

Money expert Clark Howard says that lack of accountability is one reason why the big banks love Zelle.

“The reason why the banks push Zelle so much is because it shifts all the exposure to the consumer,” Clark says. “If somebody compromises their account, they’re out the money. If they get hacked, they’re out the money. If they get scammed, there’s no way to reclaim the money.”

2. How Does Zelle Work?

Zelle works as a standalone app or you may be able to access it through your bank’s website or app. To get started using Zelle, you can sign up either of two ways:

  • Download the Zelle app on Android or iOS
  • Enroll your email address or phone number from your bank account

Once you’re connected, you can send a payment by entering their email address or phone number.


3. What Banks Use Zelle?

On its website, the company says to “look for Zelle in your banking app” because so many of them include the service into their platforms. Here’s a screenshot of the Zelle portal inside the Wells Fargo app:

Everything you need to know about Zelle app

Zelle says it has more than 400 financial institutions on board. Here are some of the big banks that have Zelle integration in their apps:

  • Bank of America
  • Capital One
  • JP Morgan Chase
  • PNC Bank
  • Wells Fargo

4. How to Send & Receive Money With Zelle

Zelle allows you to quickly send or receive money into your bank account. On its home screen, you’ll see three panels that say “Send,” Request” and “Split” (yes, you can split payments). Here’s how to use Zelle to send and receive money:

How to use Zelle app

How to Send Money Through Zelle in 4 Steps

You can send a payment by entering the recipient’s email address or phone number.

The app will show you a message that says, “Are you sure?” and will explain that the payment can’t be canceled.

Zelle app: How to send and receive money

Once you hit “Yes,” follow these four easy steps:

  1. Enter the amount
  2. Hit REVIEW
  3. Fill out the “What’s this for?” line
  4. Hit SEND

The recipient will get a notification explaining how to complete the payment.


How to Receive Money Through Zelle in 3 Steps

To request money through Zelle, you’ll have to enable the app to access your phone contacts.

Once you do that, follow these three steps

  1. Add the amount
  2. Fill out the “What’s this for?” line
  3. Hit REQUEST

Once your money arrives, you will be notified in the app.

5. Clark: The ONLY Safe Way to Use Zelle

Fraudsters are actively trying to exploit Zelle and other payment apps, so Clark advises using it only when transacting with a person you know.

In fact, on the Zelle website, it says, “You can send money to almost anyone you know and trust with a bank account in the U.S.” The “almost anyone” part means that Zelle intends this app to be used only by close associates.

Final Thought

Zelle is a money transfer service that makes payments easy, but don’t expect the app or the banks to bail you out when something goes wrong.

That’s why Clark says it’s best to limit your exposure as much as possible.

“What I recommend is that if somebody wants to use Zelle or CashApp or Venmo, set up a separate checking account that has very small amounts of money in it.”

“That way, even if you are hacked, compromised or scammed, the amount of money that is at risk is really tiny, whereas if you have it with your regular checking account, all the money in it is at risk.”

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