Who Owns Zelle? (All What You Need To Know)

Back in the day, completing a bank transaction was a chore in itself. Handling and managing financial transactions meant involving your bank every time. How times have changed! These days, we can complete a transfer with the press of a few buttons. 

You can easily shop online and wait for your home delivery with little to no fuss regarding payments. Even when we go shopping in person, we now depend on electronic transactions or just swipe a card. 

Online payment services have become a big game-changer in how we manage transactions. One of these convenient and time-saving payment methods is Zelle. 

But, you may be wondering, “Who owns Zelle?” So, here’s a breakdown of not only who owns it, but how you can enjoy using this service. Let’s get started!

Zelle and Other Banking Applications

Before the digitalization of pretty much everything, banks operated in the traditional way. This meant that for every payment required, you had to go to the bank and complete paperwork of some sort. 

This was time-consuming, and there was also no guarantee that you’d complete your transaction. Today, you can complete transactions on your smartphone, and banks have developed applications that can be used by customers to manage money without physically going to a bank. 

Who Owns Zelle?

Zelle was founded as ClearXchange in 2011, offering P2P (peer-to-peer) and business-to-business payments. It was later sold to Early Warning Services (EWS) in 2016. EWS is owned by Bank of America, PNC Bank, Wells Fargo, BB&T, Capital One, and JPMorgan Chase.

With investments from America’s biggest banks, the company rebranded itself. It was relaunched in 2017 as Zelle, and to introduce the app, close to a million dollars was spent on each TV ad. Its headquarters are in San Francisco, California. 

Did you know that Zelle became America’s largest P2P payment service two years after being launched? And around 743 million transactions were completed by Zelle’s users in 2019 alone. 

Using Zelle Services

This application enables you to send money to your friends, family, and anyone else that uses the platform. It has become very popular and now competes with Cashapp and Venmo. Zelle can do several things that other services can’t, and it’s all thanks to the fact that it is owned by banks. It’s not just another payment gateway, but it’s becoming the go-to payment method for many. 

The app supports nearly 7,000 financial institutions, which is equal to almost 100 million account holders. To register for this service, you must have a Visa debit card or a MasterCard. But there’s a catch! The card needs to be issued by a US bank. 

The good news is that when you register, you can connect your current bank account. There’s no need to open a different account that’ll correspond with the app. Other than a bank account, all you need is your mobile number or email address to complete your registration. 

You can still send money to someone who hasn’t enrolled in Zelle. However, it might take them one to three business days to receive the money after they join the app.

Why You Should Use Zelle Services

When a transaction is made between Zelle users, it’s completed within minutes. The service easily converts bank account owners into Zell customers since it’s owned by different banks. If you have a bank account with one of the major banks that own Zelle, then registering for the app is incredibly easy!

The in-app experience has been standardized across all participating banks allowing new users to run the service easily. Since we are always on the go, even when completing transactions, our smartphones are essential. If you own an iPhone 13 Pro Max, get this magnetic phone case with military-grade drop protection.

You can send money directly to a bank account, and there is no limit on the amount of cash you can send through the app. Limits are based on the bank that issued your card. The app is compatible with nearly all major banks. Many of which have the Zelle service integrated into their banking applications. 

Backlash Faced by Zelle

As with any service or brand, Zelle has faced a backlash due to some users getting scammed by other users. Fraudulent users would sell a product or service through an external site such as Craigslist. A Zelle user would pay for the product, only for the fraudulent user to then delete their account. 

Such behavior is not new to payment services. Zelle responded by stating that it’s not responsible for who its users send money to. It does, however, repeatedly mention on its website and app that users should only transfer funds to friends, family, or acquaintances. 

This small hiccup hasn’t gotten in the way of the service’s success. In the summer of 2021, Zelle had more than 500 million registered accounts in its network. Not only that, but throughout the year, its users sent 1.8 billion payments.

How Does Zelle Make Money?

Here’s where things get interesting! It doesn’t make any money mainly because its service is free of charge. When the company operated as ClearXchange, it tried to impose fees for every payment made. This idea was shut down, seeing that other services like Square Cash and Venmo were free of charge.

It remains free of charge because its banks want to retain their customers. The app has a feature that allows its users to pay businesses for products and services. Not only does this help lower the chances of fraudulent behavior, but it benefits Zelle. 

The merchants pay up to a 1% processing fee, and it’s charged to their Visa debit card or Mastercard. The revenue from this feature is then shared with the bank that has issued the card. Use an RFID blocking card to protect your card information from unauthorized scans when your bank card is in your wallet.

In the future, Zelle has shown interest in launching a Zelle-branded debit or credit card. There may be promotions of other financial products within the app, including allowing users to earn money via affiliate commissions. 

Other Online Payment Methods

Even though banks now have apps, there are other online payment methods. These are just as effective as banking applications since you can also complete transactions without any hassle. You can make use of UPIs (Unified Payments Interface) or online bank-to-bank transfers. 

Other popular UPI apps are Paytm, Google Pay, MobiKwik, Uber, and SBI Pay. When you download any of these applications, you’ll create a virtual ID that is unique to you. This will be used to make or receive any UPI payments. Just like Zelle, these payment services have their advantages and disadvantages as well.

Need more Info?

If you are wondering about which company takes which payment method when out shopping, then check out:

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Who Owns Zelle? – Final Thoughts

With a name change from ClearXchange to Zelle, this payment method has made financial transactions easier for its millions of users. After being sold to Early Warning Services (EWS), run by Paul Finch, which is owned by the major banks, Zelle users enjoy the ability to send and receive money in just minutes, as well as numerous different features from its competitor’s apps.

Despite facing a small amount of backlash, the service is favored by many people due to its convenience. It has a simple interface, and this payment solution can help small businesses manage payments more efficiently.

Happy shopping!