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It’s fascinating how quickly we’re evolving digitally, especially when it comes to making payments. People are now turning to mobile payment apps to simplify money transfers, split bills, and manage personal finances. Two popular payment platforms – Zelle and Venmo – are changing the payment landscape in the US for students. So, Zelle or Venmo? Well, both of them come with unique features, benefits, and potential drawbacks. In this Zelle vs Venmo debate, we’ll explore all the key differences between the two, from security and user interface to fees and overall usability. Let’s begin!
Zelle vs Venmo: What Are They?
In Venmo vs Zelle, we will first look at what exactly they are.
Zelle: Zelle developed by Early Warning Services, LLC, is a digital payment service for students in the US. It’s a peer-to-peer payment system that allows an individual to send and receive money quickly through their bank accounts. As of 2023, Zelle had an impressive user base of more than 159 million active users across the United States. Zelle is owned by several major banks in the US for international students, including Bank of America, Wells Fargo, and Chase. Integrated directly into online banking platforms and mobile apps, Zelle allows students to transfer money directly from their bank accounts. It even allows instant bank-to-bank transfers. So how to use Zelle? You start by registering your email or US phone number through the Zelle or mobile banking app. Then, choose someone you trust to pay a small amount and send them the money.
Venmo: On the other hand, Venmo is owned by PayPal and is one of the best banking apps. It had over 80 million active users as of 2023. Known for its social media-like interface, Venmo allows users to send money, request payments, and even split bills using messages, emojis, and visibility options. Unlike Zelle, this payment option maintains its balance system and offers a more social, interactive payment experience. To use Venmo, register on the app, then either link it with your bank account or keep a separate balance in the app. And, you can start sending and receiving money. Payments are first taken from your in-app balance (if sufficient). Or else the full amount is charged to your linked bank or credit card account. You can even pay at shops, small vendors and markets using the QR code in the app.
Zelle vs Venmo: Fees
Next on Venmo vs Zelle, we’ll explore the fees for both these options.
Zelle: It stands out for its fee-free service. This means one can easily send and receive money without paying any fee, making it an extremely cost-effective option for direct bank transfers. However, one important point to note here is that individual banks or credit unions may have their policies or fees related to using Zelle. So, make sure you check that beforehand.
Venmo: Just like Zelle, it also offers free transfers, but it charges a 3% fee for credit card transactions. For instant transfers, the app charges a fee of 1.75%, with a minimum charge of $0.25 and a maximum of $25. For in-app transactions, Venmo Business accounts incur a fee of 1.9% + $0.10 per transaction. When checking out on e-commerce platforms, Venmo charges a fee of 3.49% + $0.49. While standard transfers are free, an instant transfer offers immediate access to funds at a modest cost.
Zelle vs Venmo: Transfer Limits
Now, let’s look at the transfer limits in the Zelle app vs Venmo.
Zelle: the transfer limits vary significantly depending on the individual bank and account type. Usually, the daily send limits in Zelle range between $1,000 to $5,000, while weekly limits range between $3,000 to 10,000. One might get higher limits for business accounts or long-time customers with some banks. So, ensure to check it with your banks.
Venmo: In contrast, it has more standardized transfer limits. If your account is unverified, the weekly limit is $299.99. Once you verify your identity, this limit increases to $4,999.99 per week for person-to-person payments. For authorized merchants, there’s a separate limit, which goes up to $7,000 per week. Instant transfers have a daily limit of $5,000.
Zelle vs Venmo: USP
In the Zelle app vs Venmo debate, we now look at their unique selling proposition.
Zelle: Its USP is its direct bank integration and instant transfers between bank accounts. Zelle does not require a separate app or balance and it works seamlessly within existing banking platforms. Another USP of Zelle is that it allows users to set up their accounts in seconds without the lengthy verification process needed by Venmo.
Venmo: On the other hand, its USP lies in its social and user-friendly experience. With Venmo, one can add comments, and emojis, and create a social feed of transactions, making money transfers fun and interactive. Venmo is majorly used by the young population because of its social-media-like interface. With Venmo, you also get a linked debit card and can make purchases at select merchants. In addition, one can maintain a cash balance within the app, which enables them to make quick payments without having to withdraw funds from a checking account every time.
Zelle vs Venmo: Features
When it comes to features, what do we choose, Venmo or Zelle? Well, both of them offer distinct features that cater to different user needs and preferences. In Venmo vs Zelle, we’ll now explore the key features that set these two platforms apart from each other.
1. Payment Mode
Zelle operates as a direct bank-to-bank transfer service, which allows students to send money instantly using only the recipient’s email address or phone number. With Zelle, the money transfers happen directly between bank accounts, without the need for an intermediate balance. In contrast, Venmo provides a more flexible approach to payments with a digital wallet system. So, you can keep a certain amount in your Venmo account, link multiple payment sources like bank accounts & debit/credit cards, and choose your preferred payment mode for every transaction. Plus, Venmo extends this flexibility to merchant payments as well by offering branded debit cards for retail purchases.
2. Security
Zelle offers bank-level encryption and security protocols, benefiting from the robust security infrastructure of established financial institutions. Integrated directly into bank platforms, Zelle offers multi-factor authentication and fraud protection measures for your bank. On the other hand, Venmo uses a combination of technical and user-controlled features, including PIN protection, fingerprint authentication, and two-factor verification. Also, Venmo’s social nature requires additional privacy settings management.
3. Integrations
In Zelle vs Venmo, let’s look at their integrations which are reflected in their market positions. Zelle’s integration is focused on the banking sector, with seamless incorporation into over 1,000 bank and credit union apps. This means one can access Zelle’s features directly through their existing banking applications without downloading additional software. With a broader approach to integrations, Venmo connects with various commercial platforms. Venmo integrates with PayPal’s extensive merchant network, offers its debit card, and offers APIs for third-party developers to incorporate Venmo payments into their applications and websites.
4. Deposit Speed
So, what’s the deposit speed in the Zelle app vs Venmo? In Zelle, money transfers are usually instantaneous between participating banks. So, the funds get into your account in minutes, no matter the time of day or day of the week. While Venmo’s standard transfers to bank accounts take 1-3 business days for free. Venmo offers an instant transfer option for a fee of 1.5%. However, between Venmo accounts, you can transfer money instantly.
5. Customer Service
For Zelle, customer service is handled through individual partner banks. This means one can contact their bank’s support channels for assistance with Zelle transactions. To reach Zelle’s support team, go to the ‘contact us’ page on their official website and submit a form. For faster assistance, one can call 1-844-428-8542 between 10 AM and 10 PM ET. Whereas, Venmo provides centralized customer support through multiple channels, including in-app help, email support, and phone assistance during business hours. You can access the ‘Get Help’ section within the app to chat with or visit the Venmo Help Center online to fill out a form. You can even call (855) 812-4430 between 8 AM and 8 PM CT.
Zelle vs Venmo: Pros and Cons
Is Venmo better than Zelle? When choosing between the two, it’s crucial to understand their respective strengths and limitations. Both have their share of advantages and disadvantages. In Venmo vs Zelle, now let’s look into their pros and cons.
Zelle Pros
1. Free money transfers
2. Instant bank-to-bank transfers without a third party
3. Robust security with bank-level encryption
4. Works with major US banks and credit unions
5. Higher transfer limits through participating banks
Zelle Cons
1. Limited international use
2. Low user-friendly interface
3. No social features or bill-splitting capabilities
4. Transfer limits vary by bank and can be restrictive
5. No option to cancel initiated payments
Venmo Pros
1. Social media-like interface
2. Extensive merchant payment options
3. Linked debit card for direct purchases
4. Strong mobile-first experience with emoji support
5. Option to make payments public, private, or visible to friends
Venmo Cons
1. Instant transfer fees applicable
2. Less direct bank integration
3. Lower transfer limits for unverified accounts
4. Requires maintaining a separate app or account
5. Standard bank transfers take up to 1-3 business days
Now that we explored the difference between Venmo and Zelle, the question arises, which is better – Zelle or Venmo? It all comes down to your specific needs, banking habits, and how you prefer to handle your digital payments. Both Zelle and Venmo offer their unique features and cater to different aspects of our digital financial lives.