Are you wondering how does Zelle make money? With Zelle, users are able to send money from their bank accounts to their friends, family, and anyone else who has signed up for the platform. Zelle is a peer-to-peer (P2P) payment network.
Zelle online payment platform, established in 2011. To put things in perspective the Zelle app has around 924 banks participating in its payment networks. Every year it facilitates almost $307 billion in payments each year across its payment networks. Sounds interesting right?
Are you wondering how Zelle makes money? If so, read on. You can learn everything that you need to know about the Zelle business model in this article, including how it works, how it makes money, and more. So read on.
What Is Zelle App?
Zelle is a fast, secure, easy-to-use app that facilitates digital payments. With the help of this app, you can send and receive money from people and small businesses. If you hold a US bank account, you can use this app to transfer money between your accounts. A Zelle transaction usually takes no more than a few minutes. Its users are able to send and receive money for free.
Who Owns Zelle Company: History of Zelle
Zelle introduced in 2011 and was formerly known as ClearXchange. It was developed by Bank of America Corp, JPMorgan Chase & Co., and Wells Fargo & Company to serve as a platform for online payments. They developed this platform to compete against other payment apps, including PayPal and Venmo.
Initially, Zelle was fairly slow, with a clunky user interface. In 2016, the platform was sold to fintech company Early Warning Services (EWS), which was owned by several American financial institutions.
Suddenly with this takeover, the app scenario completely changes. With their guidance, the product development progressed at a rapid pace and was delivering the owners’ hopes and expectations.
Zelle was finally launched to the public in September 2017. A total of 30 bank partners have been added to their network. Thus, they instantly gained 100 million users, enabling them to grow rapidly.
Zelle App: How Does It Work?
Now you get the idea of what the Zelle app is about. You might be wondering how you might use this app to send or receive money. So, let’s see the step-by-step process of how the Zelle works.
The working process of the Zelle app works similarly to other types of e-wallet apps. So, using Zelle is straightforward. Let’s look at the process of how Zelle works and make money.
1. To get started with digital payments, download the Zelle app. If Zelle isn’t available at your bank or credit union, you can download the app.
2. Enter your email address and phone number once you download the Zelle app. To use Zelle, you must have a US number.
3. Now you need to enter all the personal details to verify. Upon entering your details, the Zelle home page will be displayed and you can begin the payment process.
4. Just by tapping, you can very easily find friends, family, or businesses to send or receive money. With this app, you can send money to anyone with a US bank account.
5. After this, the app will need you to enter the amount you want to send. The receiver also requires the Zelle account. If the receiver already has the Zelle app, the money will be transferred directly into their bank account, otherwise, they will get a notification explaining how to receive the money.
6. That’s it! This is the method that enables users to send money and receive money through Zelle.
Upon using it, you will discover how secure and fast it is. It may be a mystery to you how Zelle make money. Yes, right? Don’t panic as we’ll discover how Zelle makes money.
How Zelle Makes Money: Revenue Model
The interesting fact about Zelle is that this app doesn’t generate money like any other third-party intermediate. Zelle doesn’t charge any money from the banks. Let’s discuss how Zelle make any money and their revenue model in detail:
Facilitating Money
The Zelle is a p2p service and bridge between customers and banks. It was designed to serve the bank without taking any extra charges. Normally other P2P services charge your while transactions, so by using Zelle these in-house transactions fees won’t cut any charges and save a significant amount of money.
Bank Partnership
Zelle is owned by Early Warning which is a consortium of banks. So the main target of Zelle is to increase the profit revenue of these participating banks. The main purpose of this app is to serve and benefit the banks under the network, so Zelle does not make any money directly. The more transactions you make through the Zelle mobile app the more revenue the bank generates.
Merchant Transactions
There is a feature in Zelle offers for the Merchants. Through Zelle, merchants can pay for their services and products. During payment, merchants have to pay 1% extra as a charge and this charge goes to the bank.
How to Send & Receive Money with the Zelle App?
In case you’re wondering how to use the Zelle mobile app. Here is the step-by-step process on how to send and receive money with the Zelle App:
Procedure For Senders
- First of all, enter the Zelle app. If you aren’t logged in then log in first.
- Click on the “Send Money” option.
- Choose the person you want to send money to and enter their Email ID.
- After that type in the amount you want to send and click next.
- Now you need to specify the reason for sending money.
- That’s it now click the send button and your money will be sent.
Procedure For Receivers
- Receivers after receiving the money need to use the same Email ID where the money is sent.
- Now the will be a link with a payment notification, open it.
- Select your bank.
- There will be some procedure on the screen, you need to follow it to receive money.
Who Are The Top Competitors of the Zelle App?
- PayPal: This model of payment is the most widely known in the world. Using the payment system, you can transfer money online.
- Venmo: It is one of PayPal’s most popular subsidiaries. The company offers debit cards and money transfers through peer-to-peer networks.
- Apple Pay: This is a dedicated app. Payments can only be made through this app if you have an Apple device.
- Google Pay: This is an online payment system and digital wallet for Android users.
Is Zelle Safe?
Zelle transactions require no sensitive financial information, making them a safe, secure way to send money. To make sure you are the person authorizing Zelle payments, your bank or credit union should have authentication and monitoring features.
Zelle doesn’t have protection features like credit or debit cards. The best thing you can do with Zelle it allows users to send money pay people you know, like you can send money to friends and family, and even some small business owners, whom you trust. The Zelle app should not be used to send large amounts of money.
You will need to check that the mobile number or email address of the person you wish to pay for is correct. You should always do this in order to ensure that your money is being sent to the right person
Cost To Build An App Like Zelle
- An app like Zelle, which allows you to make payments through your phone, requires substantial investment and expertise.
- As part of the regulatory requirements, multiple bank systems must be integrated with the system.
- To make the payment model work, it requires that the customer has a seamless experience when it comes to making a payment, which is both faster and more convenient than traditional banking methods. For users, this can be a major selling point and provide them with a great deal of value.
- A more user-friendly payment experience is needed. Banks save a lot of money and companies that invest in these types of cash app can create new revenue streams.
Future of Zelle App
In the future apps like these will be in huge demand as they are easy to use and cashless transfers are more secure.
Due to the fact that nearly everyone is moving towards digital payment methods, Zelle is free to use app which is experiencing rapid growth in the US. Because Zelle permits users to send money to their friends and family directly from their bank account, also it allows users to make payments to their favorite shops within seconds, which makes it an attractive alternative to its competitors.
As more bank partners want to become part of the Zelle network the border widens and the demand for apps like this will increase more in the future.
Wrapping Up
With Zelle platform, you’re able to send and receive money quickly and for free. Rather than having to share sensitive information such as your bank account details, you can send money to friends or pay your favorite person with a few clicks.
As you have read this blog, you will definitely have gained a better understanding of how Zelle makes money, how it has become the talk of the town, and gained enormous popularity within a very short period of time.
Frequently Asked Questions on the Zelle App
Can you get money from Zelle?
Yes, can send and receive money from Zelle after you’ve created an account.
Is Zelle cheaper than PayPal?
Yes, Zelle is cheaper than Paypal. Paypal is a third-party software that charges money if you send or receive money through it. In the case of Zelle, it is a free-of-service app.
Is Zelle Secure?
Yes, Zelle is a secure app, you don’t have to give any personal info and you only send money to the people you trust.
