From The Verge: Zelle, a new payment service backed by more than 30 US banks, will launch its standalone app on September 12th to take on competitors like Venmo and Square Cash. The network had been quietly powering money transfers for major US banks including Bank of America, Chase, Wells Fargo, and Citibank since launching in June.
While the Zelle app won’t have social components like a share feed, comments, or a Like button, the company says it’s targeted toward users who value instantaneous transactions. Since the network works directly with banking partners, money can be transferred between accounts — regardless of bank affiliations — for free, and can be withdrawn in minutes. In comparison, Venmo balances need to be “cashed out,” and it can take at least 24 hours until that money is available in your bank account. Venmo parent company PayPal recently offered instant withdrawal for 25 cents per transaction, but has yet to roll out a similar feature on Venmo.
To use the Zelle app, customers have to sign up for a Zelle account then link their bank information. Users can send money using a contact’s email address or phone number, but the recipient must also sign up for a Zelle account to complete the transaction. You can avoid all of this by continuing to use your bank’s own app which is likely already powered by Zelle, but it’s an option for someone who wants a single-purpose app for quickly transferring money. For example, the Zelle app offers the ability to split payments between multiple people, making to easier to charge friends for a shared meal or taxi ride without individually starting a new transaction per person.
At launch, the Zelle app will support debit cards, checking, and savings accounts. (No credit cards, which is how they keep the transfers free.) The app will also offer a higher limit on how much users can transfer on its app, though this amount will vary between users based on their banking history. For my Bank of America account, Zelle offers a limit of $2,500 a day. Venmo and Square Cash, in contrast, cap user payments respectively at $299.99 and $250 a week, regardless of credit history. The amount bumps up to $2,999.99 and $2,500 a week if you verify your identity with your zip code, birthday, and the last four digits of your Social Security number.
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