How Does Zelle Make Money? Zelle Business Model

You might be wondering “how does Zelle make money” despite charging no fee for its transactions with banks participating in this service. Zelle is a peer-to-peer payment system that allows its users to send money fast and securely to family and friends without paying any fee. 

Although, Zelle doesn’t charge any fee for transactions banks in partnership with this service charge a fee for each transaction made by the users.

In this article, we have carefully researched and written about the Zelle app and the services it renders. We also explained all you should know about how Zelle earns money and its business model.

What Is Zelle?

Zelle is an online platform you can use if you have accounts with banks that participate in the app. Zelle allows you to transfer funds between bank accounts in a few minutes all for free.

During transaction with Zelle, the money transferred don’t sit in a holding account in Zelle but gets withdrawn or deposited directly into the receiver’s account. You can use Zelle to transfer smaller amounts of money even if your bank isn’t part of the app.

Zelle makes sending and receiving money easy. It works as a service to transfer money between linked bank accounts with no fee attached. Zelle doesn’t hold money in the Zelle account and you are limited to using only your bank accounts for transactions. 

Zelle is popular because it has not just the website versions but also a mobile app available for performing transactions. It has a transaction limit of $500 for accounts with banks that don’t participate in Zelle.

The limits of other banks that participate in Zelle differ and to get such information, you will have to consult your bank. 

It has top security authentication and fraud monitoring services. Zelle does not permit ATM withdrawals and is not associated with credit cards or debit cards linked to it.

Does Zelle Charge For Business Transactions?

Zelle can be used for business transactions by small business owners. It can be used to send, request, and receive money between the business owners and their clients. Suppose you are thinking of adding contactless payments.

In that case, Zelle might be a good option for you only when your business banks with one of the eleven financial institutions offer Zelle for business. The banks participating in Zelle as of recent includes:

  • Bank Of America
  • Wells Fargo
  • U.S. Bank
  • Bank Of The West
  • Citi
  • Chase
  • Investors Bank
  • Truist
  • Morgan Stanley
  • Firstbank
  • Frost

If you bank with any of these banks, you can set up your business profile to proceed. To do that, you will need to register with Zelle by signing up using your mobile number and email address. 

Read this: How To Wire Money And Receive It Immediately

What Are The Advantages Of Using Zelle For Business?

Using Zelle for small businesses can have drawbacks, but there are several benefits you can enjoy from it. They include:

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#1. Ability to accept contactless payments: 

With Zelle, transactions are digital. You will be able to send and receive funds rapidly without exchanging cash. It provides a contactless and seamless way for your customers to pay. It helps save time and money spent on checks and transactions.

#2. Quick transactions:

Funds are sent and received within minutes, regardless of the transaction time through Zelle. This helps you get your payments quickly at any time, or anywhere you find yourself.

#3. Transactions limits and fees vary depending on your bank:

Zelle lets each bank participating in it decide on the number of transactions and transfer limits their users will be able to send and receive as a small business owner.

Zelle doesn’t charge any fee for small businesses to utilize its services, but your bank may charge.

Therefore before you register with Zelle and use the service, check with your bank if you have concerns regarding the fee.

What Percentage Does Zelle Take?

Zelle doesn’t charge for transaction fees, so they don’t take any percentage, but your linked bank does. They charge a fee for every transaction you make using Zelle services. They charge according to:

Consumer accounts

Consumer accounts charge no fee to send, request or receive money.

Business account

Unlike the consumer account, the business account operates as follows:

  • They charge a fee to receive money to a business account at U.S. Bank. The fee is 2.50 percent of the transaction amount (i.e. a $15 maximum fee or a $0.25 minimum fee)
  • There’s no fee to send money.
  • There’s no fee to request money at U.S.Bank, but there’s a fee for the business account to receive that money.

Zelle Business Model: How They Make Money

Zelle first started off as “ClearXchange”, founded in 2011 by JP Morgan Chase of the Bank of America and Wells Fargo. After it was launched, Zelle was somewhat slow and had a clunky interface.

Many users complained that the app takes up to 5 days to process a payment and reflect in the receiver’s bank account. Zelle only worked with a few banks that are in partnership with it. 

In 2016, the Zelle app was sold to Early Warning, which was owned by another banking consortium.

The early warning made a lot of efforts towards the app’s development and made it able to meet the demands of the payment market, thereby rebranding the app. 

In 2017, the rebranded Zelle network was launched and its partnership was expanded to 30 banks. The Zelle app gained 100million users following its new development.

Early Warning also embarked on an aggressive marketing campaign to promote the app. They spent about $1 million on a single TV ad in the process. 

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Also, to simplify the Zelle app interface and user experience, Early Warning standardized its offering and platform interface across all banks.

The app showed growth in the millennial and baby boomer market early. It facilitated digital payments without leaving outside of their bank account.

How Zelle Makes Money

Zelle generates income by facilitating payments with banks. When a user makes payments through Zelle, banks in partner with Zelle earn revenue but Zelle Company doesn’t generate revenue independently. Zelle facilitates payments between two banks without charging the banks a third-party fee.

Due to the no-fee charge associated with Zelle transactions, consumers benefit from low-cost p2p money transfers without having to pay commissions and fees to any third party running the app.

The company is aimed at providing no charge for any transactions done using the app for as long as they could.

In 2018, Zelle made it possible for users to be able to pay merchants for purchases such as groceries.

The users don’t have to pay any fee but the merchant, on the other hand, pays a 1% fee for processing the payment. The fee paid will go to the bank running the payment network.

How To Receive Money From Zelle

As said earlier, Zelle is a service that gives a free, reliable, easy, and secure way to send and receive money to individuals.

To register with Zelle, all you need is an email address or mobile phone number to bank with Zelle regardless of which bank you are with. Here’s how to receive money from Zelle in a few steps:

  • If money is sent to you through Zelle, an email or a text notification will be sent to you concerning the payment made.
  • Click on the link in the email or text
  • Next, download the Zelle app in the apple store or Google play store if you haven’t downloaded the app, click on “Get started” to begin.
  • You will have to enter your mobile number or email, depending on how the transfer was sent, and select “continue”.
  • Check your data and privacy box, then click on “continue” to proceed.
  • Search for your bank on the “find your bank” screen. If your bank is listed, you will be redirected to complete the transfer on your bank’s website.
  • If your bank is not listed, tap on “don’t see your bank?” and you will be redirected to a new page.
  • Next, enter a Visa or Mastercard debit card on the “Add Debit Card” screen and tap “continue”.
  • Add your billing address on the next screen and click on “continue”.

If you followed these steps accordingly, then you are all set to use your Zelle account to send and receive money and also perform any future transfers from here on.

Also, you can check this: Chase Online Banking 2022 | How Does It Work

Zelle Competitors

Like every other company or business, there are always competitors. Zelle also competes with other companies in the P2P space. None of these competitors can offer you a direct link to your bank account. Some of Zelle’s top competitors include:

  1. Venom: This is a popular subsidiary of PayPal. It offers debit cards and money transfers using p2p model.
  2. PayPal: This is a payment system that supports online money transactions
  3. Apple pay: This is a mobile payment available on apple devices.
  4. Google pay: This is a digital wallet platform and online payment system primarily for android.
  5. Square: This offers merchant services and point-of-sale payment solutions along with p2p payments through the square’s cash app.
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Frequently Asked Questions On How Does Zelle Make Money? Zelle Business Model

Does Zelle charge a fee for business accounts?

No, sending, requesting, and receiving money after registering with Zelle is free for all banks participating in Zelle.

Does Zelle report to IRS?

The IRS doesn’t tax transactions between family and friends and this is how most people use Zelle but recently, the IRS now wants to know about large transactions done via Zelle.

Can you cancel a payment after it has been sent via Zelle?

No, once a transaction has been made via Zelle, you cannot cancel it.

Does Zelle have a debit or credit card?

Zelle does not have a branded debit or credit card you can use in performing transactions. 

Can I link my Zelle account to a credit card?

Unlike most P2P apps, Zelle accounts can’t be linked to a credit card.

What is the limit amount I can send using my Zelle account?

Zelle limits its users to sending approximately $1,000 a week or up to $5,000 a month. This depends on your bank so to know your limit, check the sending limit of your bank.


Zelle is a reliable, easy, and secured means of sending, requesting, and receiving money. Small business owners and most companies use this p2p system of transactions in their daily business. With Zelle, a cashless transaction is guaranteed and all you need to join this system is your email or phone number.


  • Businessinsider– How To Receive Money On Zelle
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  • Usbank– Is There A Fee For Requesting Money Using Zelle?
  • nbcnews– Venom, PayPal, Cash App And Zelle Must Report $600+ In Business Transactions To IRS
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  • finty– How Does Zelle Make Money?


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