Why You Probably Shouldn’t Use Zelle

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Over the past couple of years, Zelle has exploded in popularity. Virtually everyone has heard of it and many have even ditched PayPal and Venmo. While this may be surprising at first glance, when you consider the advantages of Zelle such as instant transfers, direct integration with bank accounts, and no fees, it’s no wonder why it’s so popular. But, like all things, there is one caveat to this service. While the service itself is exceptional, the reason that it’s so fast and cheap is that its from the big banks themselves. Historically, big banks have abused their trust over and over again even leading to disasters like the 2008 financial recession. And, the big banks gaining control over the p2p payment market will just further increase their power over our financial lives. So, while Zelle itself is a great service, its popularity may not be the best thing for society. This video explains the story of how Zelle was created, why it’s so popular, and the dark truth about the service.

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Timestamps:
0:00 - The Rise Of Zelle
1:20 - Early Failure
4:31 - Introducing Zelle
7:31 - The Bad
10:35 - The Ugly

Resources:

Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.

[mradamdsmith]

I run a small business and take PayPal payments. Unfortunately, PayPal will also hold payments until you have more history, leading to the money being tied up longer. And then there are fees on top of that. Zelle just moves the money and that's the end of it. Much, much better.

[MrAngenos]

At least Zelle isn’t trying to charge me $2500 for my different opinion

[pavelkoudelka]

This always surprises me. In the Czech Republic, we have had instant payments between most banks for years, and banks that do not participate in this system usually transfer funds on the next business day. For example, I always have to laugh if I hear about using checks in America TODAY, for example. In our country, they are practically no longer accepted by banks, and no one has been using them for decades.

[caladonius]

My last Landlord used Zelle. He found it very convenient with his tenants and other small business, like plumbers and such. No fees that I remember him speaking of and payments were instantly credited to the correct accounts. Also, Credit Unions use the network. Because mine does. That's all that I know about Zelle.

[jadengrant]

This video didn't make me think Zelle is bad, and I use it fairly frequently; it's an outstanding service as well, so I need to know what you are on about.

[thetimebinder]

Can you imagine the dystopian nightmare of banks creating cards that let you pay merchant instantly directly from your bank account? Crazy.

[sweytank]

Imo, India's UPI still stands out of any payment method. It would be wonderful if you cover it as its way ahead of Zelle or PayPal.

[riteshyejju]

I really like zelle but UPI in India is my favorite, it works great. UPI changed lives of millions of people. I think eRupee will be revolutionary in terms of transactions/payments. Excited to see how it will work out.

[Absol]

In Venezuela Zelle is actually used and accepted almost everywhere, something like 95% of places accept it in one way or another. We basically adopt anything that allows us not to use our native currency.

[scottfranco]

Zelle always worried me, so I only use it to pay trusted persons. Thanks for the deep dive, I didn't really know much about Zelle.

[samueladams]

Transfer using PayPal takes a 1-3 business days. Zelle typically takes 30s. Ain’t nobody for time for that!

[jdubsfl]

Another major con of Zelle: it provides banks (and by extension the IRS) with a trail of transactions that otherwise could've normally been conducted in cash. As a consequence, when the IRS polls your bank they can retrieve a list of your Zelle transactions and include these when reconciling your returns. Businesses are now required to report any digital payments above $600 to the IRS.

[sustain]

Meanwhile UPI: You guys still charge transfer fees, That's ridiculous

[neilmarkcorre]

Coming from a "developing country" (or 3rd world), we've had instant transfers and easy transfers using phone numbers for years now. You can also make transfers using QR codes between banks. There are convenience fees but it's fine given the convenience of instant transfers. All bills are also accessed and paid in the same app, adding to the convenience.

[portiasnowdon]

Hmmm as a Canadian I don’t understand this, we just interact e-transfer directly from our banking apps? We don’t really use 3rd party apps.. isn’t that just a money grab for fees?

[balpreetsingh]

You can also cover NPCI's UPI, since it has started to go global now.

[n]

This problem has already been answered by UPI used in India. total annihilation of credit card

[seanisthemansk]

The one and only time I used Zelle to send my mom 1k, she never got it until 6 months later. When I called Zelle they told me to call the bank and when I called the bank they told me to call my moms bank. My moms bank told me they never got it. No one was able to help us and then one day 6 months later my mom saw it finally in her account. So I absolutely HATE zelle

[DeltaDemon]

Been using paypal for years. Never even heard of Zelle or Venmo. Even if I had heard of it, they mean nothing. Paypal is self explanatory. Naming should mean something.

[Anton-V]

In Mexico we have a system called SPEI, virtually all banks support it and most of the time transactions will go through within a few minutes or seconds, I think is really convenient but it's not very popular, a lot of people don't have a bank account and most people who have one withdraw all their funds on their payday and just use cash