What Is Zelle, and How Does It Work?

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Zelle is a person-to-person (P2P) payment service that was originally founded under the name clearXchange in 2011 by the Bank of America, JP Morgan Chase and Wells Fargo. Initially, this payment app was a bit slow and needed some optimization, so clearXchange was revamped and rebranded as Zelle before its launch in 2017. 

While Zelle has been around for several years now, you might’ve only recently started seeing it show up in various apps, on websites or in your online banking portal. If you’re curious about this platform, join us for a look at what Zelle is, how it works and what makes it different from other payment apps like PayPal, Cash App and Venmo.

What Is Zelle? 

Zelle is an easy-to-use platform for sending and receiving money between U.S. bank accounts. More than 1,000 banks and credit unions already have Zelle built right into their online platforms. This makes it easy to send money directly from your bank account to a friend or family member without going through a third-party provider. Zelle is also completely free to use, with no hidden fees. 

If you send money to someone already enrolled with Zelle, either through their own bank or through the Zelle app, the money should appear in their bank account within minutes. If your recipient hasn’t enrolled with Zelle, they’ll get an email with instructions that walk them through how to go about receiving your payment. 

How to Set Up a Zelle Account

Signing up for Zelle is easy and may be something you can do from your existing bank account. To start, check out Zelle’s list of participating banks and credit unions, select your financial institution from the list and follow the prompts to sign in to your online banking account. 

You’ll then provide some basic information, such as your email address and phone number, which other users will be able to use to send money to you with Zelle. Last but not least, select which bank account you’d like to associate with Zelle. 

What if your bank or credit union isn’t already associated with Zelle? No worries. You can still sign up with your Mastercard or Visa debit card on the Zelle app, which is available in the Apple App Store and Google Play. 

How Does Zelle Work?

If you were able to sign up for Zelle through your financial institution, then you’ll be able to use it right from your banking app. Once you’ve logged in, Zelle will usually appear as an option under the “Pay & Transfer” tab. 

Choose whether you’d like to send or receive money, and then add contacts via their name, phone number or email. Zelle also has options that allow you to choose from your phone’s contacts or pay by scanning a QR code. 

Once you’ve added your recipient, type in the amount of money you want to send or request, review the transaction and send it. 

How Is Zelle Different From Other P2P Payment Apps?

If you’ve ever used PayPal, Venmo or Cash App, then the process outlined above probably sounds pretty familiar. Zelle is similar to other P2P payment apps in a few ways but very different in others. 

Unlike PayPal, Venmo and Cash App, Zelle is only designed to make transfers between personal bank accounts; you can’t use it for things like purchases unless a store’s bank offers Zelle for small businesses. While many other P2P payment systems offer a cash or debit card you can link to your account, Zelle doesn’t because it’s already linked to your regular bank account. 

Zelle’s capabilities essentially begin and end with fast, free bank account transfers. While many other P2P apps are branching into services such as offering cryptocurrency and stock trading or rewards from partner retailers, Zelle has preferred to stick to its primary purpose. 

While it’s not the kind of app you can link to various cards and accounts, its strength lies in the fact that it’s absolutely free. Most other P2P platforms charge various fees for certain features or services, which is something you don’t have to think about with Zelle. 

Is Zelle Safe to Use?

Zelle’s authentication and monitoring features make it safe to use, as long as you only use it with people you know and trust. Zelle itself emphasizes this point on its website, which includes tips and resources to help users avoid scams. It’s also important to be certain you’ve selected the correct contact before sending money. You can’t reverse transactions in Zelle. 

Last but not least, Zelle advises that you may be better off using a different payment method if you don’t know the person you’re paying or aren’t certain you’ll get what you paid for. While many credit card companies offer payment protection programs, Zelle does not. 

The Pros and Cons of Zelle

When it comes to transferring money quickly to people you know and trust, Zelle is a great option. But if you’re looking for more, you may want to check out other P2P options. Here’s a quick review of Zelle’s pros and cons. 


  • Has an easy account-creation process
  • Is integrated into the apps of 1,000 banks and credit unions
  • Offers lots of options for finding contacts
  • Doesn’t have fees of any kind 
  • Has no third-party transfers for sending funds to your bank account
  • Sends money to anyone with an account at any U.S. bank


  • Can only transfer money to other bank accounts
  • Isn’t a common retailer payment method
  • Doesn’t offer the additional features of P2P apps like PayPal, Venmo or Cash App
  • Offers no payment protection program

Overall, Zelle is more or less designed to add P2P capabilities to your existing bank account. It’s more of a handy feature rather than a whole separate payment platform. Many people choose to use Zelle in addition to other P2P apps on a situational basis, so it’s never a bad idea to add it to your financial toolbox.