Jump to content

Zelle

From Wikipedia, the free encyclopedia
(Redirected from Zelle (payment service))

Zelle
FormerlyclearXchange
TypePrivate
Industry
Founded2016; 10 years ago (2016)
Headquarters
Scottsdale, Arizona
,
United States
ServicesElectronic funds transfer
ParentEarly Warning Services, LLC
Websitezelle.com

Zelle (/zɛl/) is an American digital payments network run by a private financial services company owned by Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo.[1][2][3] 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. Transfers between bank accounts of registered users are typically completed within minutes. There is currently no fee or charge on the transaction to users.[1] Instead, participating banking institutions are charged a fee per transaction.[4]

The Zelle service was launched in June 2017,[1] as the successor to the clearXchange payment service. Zelle has expanded, and as of 2022, 80% of the US population could connect to Zelle through their banking app, with over 1,600 financial institutions participating.[5] Zelle has been criticized for being a platform that has facilitated online financial fraud in the United States.

In April 2025, Zelle shut down its standalone app, requiring all users to interact with Zelle through their bank's app.[6]

History

[edit]

Zelle originated as clearXchange, a payments service launched in April 2011 by Bank of America, JPMorgan Chase, and Wells Fargo.[7][8] The platform enabled person-to-person, business-to-consumer, and government-to-consumer payments.[9]

By 2015, clearXchange had expanded to include US Bank and Capital One as owner-members.[10][11] That same year, it announced the availability of a real-time payments system.[12][13] In 2016, clearXchange was acquired by Early Warning Services, a financial technology company.[14] At the time of the acquisition, Early Warning was owned by Bank of America, US Bank, Chase, Capital One, Wells Fargo, PNC Bank, and BB&T, which would later become Truist.[15][16] The following year, Early Warning introduced Zelle and announced the phaseout of clearXchange's person-to-person service.[17]

In March 2019, Early Warning Services CEO Paul Finch stepped down to work for his family's charitable foundation.[18] In May 2019, Early Warning Services appointed a new CEO, Albert Ko, who was formerly the chief transformation officer for Intuit.[19]

By the end of 2022, Zelle was offered by approximately 1,800 financial institutions and reached about 80% of Americans with bank accounts, processing $1.6 billion in daily transactions.[20] In August 2023, Early Warning appointed Cameron Fowler as chief executive officer, succeeding Albert Ko.[21] In September 2024, Denise Leonhard, formerly of Venmo, PayPay, and American Express, became general manager of Zelle.[22]

During 2024, Zelle processed over $1 trillion in transactions, with approximately $283 billion being sent or received by small businesses.[23][24] By the end of that year, Zelle was connecting 151 million consumer and small business bank accounts.[23][25] 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 alleged that these entities "failed to properly investigate fraud complaints or give victims reimbursement."[26][27] The CFPB dismissed the lawsuit with prejudice in March of 2025.[why?][28] New York Attorney General Letitia James filed a similar lawsuit against Zelle in 2025.[29]

In April 2025, Zelle discontinued its standalone mobile app, requiring customers to access the service through participating banks' applications.[30] As of July 2025, Zelle was offered by 2,300 financial institutions, with 95 percent of those institutions being either community banks or credit unions.[31][32]

Service

[edit]

Zelle is a digital payments network in the United States that enables person-to-person money transfers.[33] It is available to individuals or small businesses that have a U.S.-based checking or savings account with a participating bank or credit union.[34][35] Transactions are typically settled within minutes,[36] moving directly from the sender’s bank account to the recipient’s bank account without Zelle holding the funds.[37][38]

Zelle does not charge users any fees for sending, receiving, or requesting money. The same is true of the majority of the financial institutions within the payments network.[39][40] Its principal competitor is PayPal and its Venmo payment service.[1][41]

Criticism

[edit]

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.[1][42][43][44] 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.[45][46] 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.[47][48][49] Shortly before releasing a critical report,[50] 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.[51]

See also

[edit]

References

[edit]
  1. 1 2 3 4 5 Cowley, Stacy (April 22, 2018). "Zelle, the Banks' Answer to Venmo, Proves Vulnerable to Fraud". The New York Times. ISSN 0362-4331. Archived from the original on October 17, 2018. Retrieved October 1, 2022.
  2. ↑ "Early Warning Corporate Overview" (PDF). Early Warning Services official website. Archived (PDF) from the original on January 12, 2018. Retrieved January 12, 2018.
  3. ↑ "17 Best Online Banks That Use Zelle - A Complete List!". All Finance Deals. May 5, 2022. Archived from the original on May 6, 2022. Retrieved June 9, 2022.
  4. ↑ 9Star Solutions. "How Does Zelle Make Money: A Simple Guide to Digital Payment Profits". LinkedIn.{{cite web}}: CS1 maint: numeric names: authors list (link)
  5. ↑ Nunez, Adriana (September 9, 2022). "Zelle's five-year growth is a harbinger for the future of P2P payments". Insider Intelligence. Retrieved March 24, 2023.
  6. ↑ "Changes to the standalone Zelle® app | Zelle". www.zellepay.com. Archived from the original on April 5, 2025. Retrieved April 5, 2025.
  7. ↑ Smith, Aaron (May 25, 2011). "New cash transfer service rivals PayPal". CNN Money. Archived from the original on April 27, 2015. Retrieved July 29, 2015.
  8. ↑ Salmon, Felix (May 25, 2011). "Why clearXchange is great for payments". Reuters. Archived from the original on May 27, 2011. Retrieved July 29, 2015.
  9. ↑ Heun, David (July 15, 2015). "clearXchange: We Have the Answer to Real-Time Payments". Payments Source. Archived from the original on June 18, 2015. Retrieved July 29, 2015.
  10. ↑ Bhattarai, Abha (March 9, 2014). "Capital One to begin offering peer-to-peer money transfers via email, mobile phone". Washington Post. Retrieved November 13, 2025.
  11. ↑ "US Bank Latest Owner-Member of clearXchange". PYMNTS.com. March 17, 2015. Archived from the original on July 18, 2015. Retrieved August 1, 2015.
  12. ↑ Bakker, Evan (June 21, 2015). "Here's What Happened in Payments this Week". Business Insider. Archived from the original on August 5, 2015. Retrieved July 29, 2015.
  13. ↑ Heun, David (June 15, 2015). "Bank Consortium clearXchange Debuts Real-Time Payments". American Banker. Archived from the original on June 18, 2015. Retrieved July 29, 2015.
  14. ↑ Adams, John (January 12, 2016). "Early Warning, ClearXchange Tackle the Security of Faster Payments". American Banker. Retrieved November 13, 2025. Early Warning announced Tuesday that it had closed its acquisition of clearXchange, the country's largest financial institution-led payments network.
  15. ↑ "ClearXchange, Early Warning Merger Keeps Banks at Helm". American Banker. October 26, 2015. Retrieved November 13, 2025. Under an agreement announced Oct. 26, Early Warning, a risk management collaboration owned by Bank of America, BB&T, Capital One, JPMorgan Chase and Wells Fargo, will acquire ClearXchange … As part of the agreement, U.S. Bank and PNC are expected to join B of A, Capital One, JPMorgan Chase and Wells Fargo as owners of the combined company.
  16. ↑ Chemtob, Danielle (December 9, 2019). "BB&T, SunTrust finish merger to become Truist in 'seamless' change. Here's what's next". Charlotte Observer. Retrieved November 13, 2025.
  17. ↑ Perez, Sarah (June 12, 2017). "Zelle, the real-time Venmo competitor backed by over 30 U.S. banks, arrives this month". TechCrunch. Retrieved November 13, 2025.
  18. ↑ Crosman, Penny (May 17, 2018). "Zelle founder Paul Finch to step down". American Banker. Archived from the original on March 6, 2021. Retrieved August 6, 2023.
  19. ↑ "Zelle operator Early Warning hires new CEO". American Banker. May 30, 2019. Archived from the original on November 8, 2020. Retrieved November 16, 2020.
  20. ↑ Fitzgerald, Kate (December 22, 2022). "Zelle's rocky rise in 2022". American Banker. Retrieved November 13, 2025.
  21. ↑ Edelen, Amy (August 13, 2023). "Early Warning Services, the Scottsdale company behind Zelle network, names new CEO". Phoenix Business Journal. Retrieved November 13, 2025.
  22. ↑ "People on the Move". Crain's New York Business. September 24, 2024. Retrieved November 14, 2025.
  23. 1 2 Son, Hugh (February 12, 2025). "Zelle payments top $1 trillion in 2024 as network's growth outpaces rivals including PayPal". CNBC. Retrieved November 14, 2025.
  24. ↑ Pizzolato, Joey (September 16, 2025). "Zelle's small business bet helps boost payments volume". American Banker. Retrieved November 13, 2025. Small businesses sent or received a total of $283 billion across more than 500 million transactions in 2024.
  25. ↑ Grant, Wesley (February 12, 2025). "Amid Increasing Competition, Zelle Leads the P2P Pack". Payments Journal. Retrieved November 14, 2025.
  26. ↑ "CFPB Sues JPMorgan Chase, Bank of America, and Wells Fargo for Allowing Fraud to Fester on Zelle". Consumer Financial Protection Bureau. December 20, 2024. Retrieved December 22, 2024.
  27. ↑ "Early Warning Services, LLC; Bank of America, N.A.; JPMorgan Chase Bank, N.A.; Wells Fargo Bank, N.A". Consumer Financial Protection Bureau. December 20, 2024. Retrieved December 22, 2024.
  28. ↑ "CFPB drops lawsuit against JPMorgan Chase, Bank of America and Wells Fargo over Zelle fraud". CNBC (Finance). March 4, 2025. Retrieved July 22, 2025.
  29. ↑ Stempel, Jonathan (July 22, 2026). "Zelle must face New York attorney general lawsuit over 'rampant' fraud, judge rules". Retrieved September 30, 2026.
  30. ↑ Valinsky, Jordan (April 3, 2025). "Zelle is shutting down its app. Here's how you can still use the payment service". CNN. Retrieved November 14, 2025.
  31. ↑ Cooley, Patrick (July 16, 2025). "Why small banks may shun Zelle". Payments Dive. Retrieved November 14, 2025.
  32. ↑ "Zelle grows to more than 2,300 financial institutions". ABA Banking Journal. July 14, 2025. Retrieved November 13, 2025.
  33. ↑ Cowley, Stacy (June 12, 2017). "Cash Faces a New Challenger in Zelle, a Mobile Banking Service". New York Times. Retrieved March 23, 2026.
  34. ↑ Hickey, Bethany (April 24, 2025). "Zelle drops standalone app: Now what?". Tri-City Herald. Retrieved January 13, 2026.
  35. ↑ Pizzolato, Joey (September 16, 2025). "Zelle's small business bet helps boost payments volume". American Banker. Retrieved January 13, 2026. Payments to small businesses were the fastest growing use-case for Zelle, increasing 31% to $180 million.
  36. ↑ Thompson, Julie (July 8, 2024). "Zelle for Business". Business News Daily. Retrieved January 13, 2026.
  37. ↑ Gill, Lisa L. (January 24, 2023). "CR Finds Potential Consumer Risks for Users of Apple Cash, Cash App, Venmo, and Zelle". Consumer Reports. Retrieved March 23, 2026.
  38. ↑ Avery, Dan; DeMatteo, Megan (January 14, 2026). "The best money transfer apps of 2026". CNBC. Retrieved January 14, 2026.
  39. ↑ Staples, Ana (February 29, 2024). "Zelle allows you to send and receive money in minutes — here's how it works". CNBC. Retrieved January 13, 2026.
  40. ↑ Silberling, Amanda (April 1, 2025). "Zelle is shutting down its app, but you probably don't need to worry". TechCrunch. Retrieved January 13, 2026.
  41. ↑ Sidel, Robin (August 24, 2016). "America's Biggest Banks Have a New Name for Their Venmo-Killer: Zelle". Archived from the original on December 25, 2019. Retrieved February 11, 2020.
  42. ↑ Nguyen, Vicky; Martinez, Didi; Enoch, Joe; Tak, Michelle (June 11, 2019). "Never used Zelle? Scammers can still use it to drain your bank account". NBC News. Archived from the original on February 26, 2020. Retrieved August 6, 2023.
  43. ↑ Sullivan, Bob (April 23, 2019). "Zelle Fraudsters Find New Victim Pool: Consumers Who Don't Even Use Zelle". Money Talks News. Retrieved August 3, 2023.
  44. ↑ Cowley, Stacy; Nguyen, Lananh (June 20, 2022). "When Customers Say Their Money Was Stolen on Zelle, Banks Often Refuse to Pay". The New York Times. Retrieved March 18, 2024.
  45. ↑ "District of Connecticut | Florida Man Admits Defrauding Zelle Users | United States Department of Justice". www.justice.gov. May 21, 2024. Retrieved July 11, 2024.
  46. ↑ Jenkins, Seb (July 3, 2024). "Florida Man Pleads Guilty in Zelle Fraud Case - the Daily Muck". The Daily Muck. Retrieved July 11, 2024.
  47. ↑ Perez, Sarah (February 16, 2018). "Zelle users are finding out the hard way there's no fraud protection". TechCrunch. Archived from the original on May 30, 2020. Retrieved October 1, 2022.
  48. ↑ Matarese, John (October 20, 2019). "How scammers use Zelle to drain your bank account". WCPO. Archived from the original on February 15, 2020. Retrieved August 3, 2023.
  49. ↑ "Zelle Transfer Service Addendum to Wells Fargo Online Access Agreement". Wells Fargo official website. August 25, 2020. Archived from the original on February 11, 2020. Retrieved January 5, 2020.
  50. ↑ Office of Sen. Elizabeth Warren (October 2022). "Facilitating Fraud: How Consumers Defrauded on Zelle are Left High and Dry by the Banks that Created It" (PDF). Archived (PDF) from the original on October 8, 2022. Retrieved October 5, 2022.
  51. ↑ Cowley, Stacy (October 3, 2022). "Few Customers Get Refunds for 'Rampant' Zelle Fraud, Senator's Report Says". The New York Times. Archived from the original on October 5, 2022. Retrieved October 5, 2022.
[edit]
Retrieved from "https://en.wikipedia.org/w/index.php?title=Zelle&oldid=1377792289"