# Zelle

Zelle (/zɛl/) is a United States–based digital payments network run by a private financial services company owned by the banks Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo. The Zelle service enables individuals to electronically transfer money from their bank account to another registered user's bank account (within the United States) using a mobile device or the website of a participating banking institution. There is currently no fee or charge on the transaction.
The Zelle service was launched in June 2017, as the successor to the clearXchange payment service. Zelle has expanded, and as of 2022 eighty percent of the US population could connect to Zelle through their banking app, with support by over 1600 financial institutions. It has been criticized for being a platform that has facilitated online financial fraud in the United States. In 2022 at a Senate Banking Committee hearing it was censured for not giving refunds to people who were tricked by criminals using Zelle.

## History

In April 2011, the clearXchange service was launched. It was originally owned and operated by Bank of America, JPMorgan Chase, and Wells Fargo. The service offered person-to-person (P2P), business-to-consumer (B2C), and government-to-consumer (G2C) payments.
For person-to-person payments, clearXchange enabled users to send money to other registered users having accounts at participating banks in the United States. Users accessed the network within the websites and apps of member financial institutions, and through clearXchange's website. The network connected with existing bank accounts, so consumers would not need to fund a separate account to use the service. This feature and the lack of fees for using the service were highlighted as advantages for competition with other person-to-person payment services such as PayPal, Popmoney, and Square. The system associated each user bank account with an email address and mobile phone number, so only the recipient's email address or mobile number was needed to send money directly from a bank account to the bank account of another person who had signed up for the service.
The number of financial institutions affiliated with clearXchange grew to include other banks and credit unions. Capital One and US Bank were added as additional owner-members. In June 2015, clearXchange announced the availability of a real-time payment system. Some transactions could take as much as five days or longer to be completed.
In January 2016, clearXchange was sold to Early Warning Services, LLC, owned by Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, US Bank, and Wells Fargo.
In September 2017, Early Warning Services released the Zelle payment system and mobile app and announced that all clearXchange "person-to-person" payment service accounts would be deactivated in December 2017. After that, clearXchange stopped supporting person-to-person payments but continued to provide payments from companies and government entities to certain customers. The company encouraged the former users of clearXchange to sign up for the new Zelle service. As in the former clearXchange service, payees are identified in the Zelle service by an association between the recipient's bank account and an email address or mobile phone number. Money sent to a registered payee who has an account at a financial institution that is a member of the Zelle network is typically available to the recipient "within minutes".
In March 2019, Early Warning Services's CEO, Paul Finch, stepped down to work with the Finch Family Foundation, a Phoenix, Arizona, charitable organization. Finch cited his long tenure, the completion of the launch of the Zelle network, and the company's plans to start new projects as reasons for the timing of his departure. In May 2019, Early Warning Services appointed a new CEO, Albert Ko, who was formerly the "chief transformation officer" for Intuit. While with Intuit, Ko was the general manager for the Intuit Mint finance software and an overseer of QuickBooks. The remainder of clearXchange was shut down on July 5, 2022.
The Zelle service has expanded, and as of 2022 processed the largest dollar amount of peer-to-peer payments in the United States every year among comparable services. Zelle had transactions of more $1.6 billion a day, or $1 million a minute, in the first half of 2022. As of September 2022, eighty percent of the US population had Zelle connected through their banking app, with access also available through Zelle's standalone app.
In 2024, Early Warning Services created the Paze digital wallet, to support payments for online purchases.

## Service

The Zelle service is intended for payments to those whom the payer already knows and trusts and the service disclaims any responsibility for goods and services sold through the system. Zelle uses ACH to settle the payments overnight, similar to direct deposit.
Zelle users can send money to other registered Zelle users. (If they attempt to send money to unregistered recipients, the intended recipient will receive an invitation to sign up for the service to complete the transaction.) Alternatively, money can be sent to unregistered users using only their checking and routing information with no need to register by the recipient. Users access the network within the websites and apps of Zelle-participating U.S. financial institutions and through the Zelle mobile app. To register with the Zelle mobile app, users must enroll a supported Mastercard- or Visa-branded debit card issued in connection with a U.S. bank account.
The network connects with existing bank accounts, so consumers do not need to fund a separate account to use the service. Only the recipient's email address or mobile number is needed for a user to send money directly from their bank account to the recipient's bank account. An email address or mobile phone number may be actively enrolled in Zelle to receive payments at only one financial institution. To register at multiple banks, users need to provide different email addresses or mobile phone numbers for each.
A Zelle user can transfer money to a recipient or submit a request for others to send a payment or to split the cost of a payment.
There are limits on the dollar amount and frequency of transactions allowed on Zelle imposed by the banking institution associated with the account being used. For example, as of 2020 transfers from most Wells Fargo funding accounts are limited to $2,500 per day and $20,000 in a 30-day period, and lower limits may apply for new payees or when using the Zelle mobile app rather than the bank's self-operated services. Transfers from a Chase checking account are limited to $2,000 per day and $16,000 per calendar month, as of 2017. Payments made using Zelle cannot be canceled (unless an attempt was made to send a payment to someone who has not enrolled in the service).
The Zelle website launched in June 2017 says that "Transactions between enrolled Zelle users typically occur in minutes. If your recipient is not yet enrolled with Zelle, it may take between 1 and 3 business days after they enroll."

## Competition with Venmo

The Zelle service's principal competitor is PayPal and its Venmo payment service. Venmo is more popular, based on public awareness, opinion polling, and active engagement with users, but Zelle processes a much larger dollar volume of money transfers, transferring transactions of more than $1.6 billion a day in the first half of 2022.
The two services work very similarly from the user's perspective; e.g., both services use email addresses and mobile phone numbers to identify recipients, but Venmo lacks the direct integration with banking institutions that Zelle has and Zelle money transfers are typically processed more quickly.
Starting in January 2018, Venmo began to offer a more rapid transfer option than its typical one- to three-day transfer service. Venmo charges a fee for the service, whereas Zelle-affiliated banks do not. The Zelle network does not charge users a fee for money transfers. Banks are allowed to charge a fee for Zelle transfers involving their accounts, but they generally do not.
Both Venmo and Zelle payments to a registered user cannot be canceled (at least without the explicit permission of the recipient).

## Partners

The Zelle Network has more than 1600 financial institutions, including the network partners Mastercard, Visa and processor partners such as FIS, Fiserv, and Jack Henry & Associates.

## Criticism

The Zelle service has received negative publicity due to fraud incidents where bank customers’ accounts were compromised through social engineering tactics. In these cases, fraudsters set up Zelle accounts in the victims’ names and used them to transfer funds out of the victims’ accounts, often leaving the victims with limited practical or legal options for recovery. In one case, a Florida man pled guilty to defrauding victims of $250,000 by convincing them to make payments using Zelle to reverse purported fraudulent transactions. In some cases, bank customers have been compensated by the banks involved, depending upon the bank and its policies and the specifics of the incident. Banks may use secondary confirmation methods such as SMS or otherwise place limits on newly created accounts and transfers to recently added recipients as a preventive measure. Shortly before releasing a critical report, Senator Elizabeth Warren criticized Zelle executives at a September 2022, Senate Banking Committee hearing, both for lack of refunds in cases of fraud, and lack of response to requests for statistics.

## Regulatory action and fraud concerns

In December 2024, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Early Warning Services (EWS), the operator of Zelle, along with three major banks: Bank of America, JPMorgan Chase, and Wells Fargo. The lawsuit alleges that these entities failed to protect consumers from widespread fraud on the Zelle network.
Key allegations in the lawsuit include:
* Customers of the three banks named lost more than $870 million over Zelle's seven-year existence due to fraud.
* The banks and EWS rushed Zelle to market without implementing effective consumer safeguards to compete with apps like Venmo and CashApp.
* Hundreds of thousands of consumers filed fraud complaints but were largely denied assistance.
* The banks failed to properly investigate complaints or provide consumers with legally required reimbursement for fraud and errors.
The CFPB is seeking to stop the alleged unlawful practices, secure redress and penalties, and obtain other relief. CFPB Director Rohit Chopra stated that the banks' failure to implement proper safeguards made Zelle "a gold mine for fraudsters".