What is Zelle?

What is Zelle?

I have been using Zelle from the day that my bank added the service and I have had mixed reviews on it. As a person that is very technically adept I don’t get caught in the hype of the shiny penny. There is never a perfect app and all of them should be used to accomplish a task and not every task. Some folks would say I will never use anything but Photoshop to edit a picture but I have proven that with using a couple of free downloadable apps I can create a similar picture in much less time. Similarly there are apps I would not use in all cases but having the right tool for the right task is important. The questions I have been asking myself in using it this year have been…Is Zelle that best payment app?

I always start my research with a Why? I really wanted to know why Zelle came into existence and I always try to understand how the relationship worked.

Zelle got a number of banks the likes of JP Morgan, Wells Fargo, Capital One and Bank of America to put together a consortium under a company named Early Warning Systems LLC (you would think that the name would have been something more financially driven but I digress). These banks were sick of getting beaten to the punch by other app providers who had nothing to do with banking so they banded together to provide a solution of their own. For a little while there I was thinking that big business had finally figured out a way to beat the entrepreneurs at their own game. This would be the start of hotel chains banding together to stomp out AirBnB or Taxi and Limo Commissions everywhere doing something similar to quell the giant that Uber has become. I was completely mistaken…

I must say that I was not really impressed the first few times I used it. There was no way for me to know if the bank of the person I was sending money to could accept Zelle or not (roll the clock one year later and there still is no way to figure it out without asking the recipient). I was also quite surprised that depending on your bank the interface has a number of different options.

I believe that these banks thought they would quickly gain the market-share on the payment app market because the app was being directly backed up by the bank. I would say that I was also sucked into thinking that this meant that using Zelle would be safer than using other apps. Recent New York Times articles have stated the contrary. If you do some research you will find case after case of fraud transactions which Zelle nor the banks are prepared to manage.

When consumers have complained to Zelle, the company often passes them to the participating bank, who in turn wrap the consumer into a web of paths that never seem to lead to a resolution. Even for things as simple as sending money to the wrong person, consumers have not been able to retrieve their funds. It really seems that customers are on their own when dealing with Zelle.

I have limited my use of Zelle to only paying family members and close friends. Since there is little recourse in getting your money back when there is an instance of fraud. Others have resorted to only using Zelle through a credit card rather than their checking account. By doing this the credit card is taking on the risk of the fraud and can handle this through their fraud departments.

I will most likely continue to use Zelle for its ease of use but will definitely continue to use other payment apps to reduce my risk of losing my hard earned money. I would consider it one of the best poor apps on the market.

Have you had any issues with Zelle or do you think its the best payment app you have used?

Let us know in the comment box below.