Zelle vs. Venmo: What’s the Difference and Which Is Better?

If you often send or receive payments from your friend for family, you have probably heard of Zelle or Venmo already. These are services that allow people to send and receive personal payments easily. To send money, users simply need an email address or phone number to set up a payment.

Although these payment services seem similar, the services are different, with some variations in fees and account features that are worth knowing about. If you would like to learn more, continue reading on for more about Zelle vs. Venmo, including how to get started and more about  the account features.

What is Zelle?

Zelle is a mobile banking feature for banks involved in the network which allows users to make peer-to-peer transactions. Users can either send or receive money by simply using email addresses or mobile phone numbers. The benefit of using Zelle for  your transactions is that the money goes directly between the bank accounts of senders and recipients.

If you are looking to use Zelle, you will first need to enroll. into it  by downloading the Zelle app and sign up there. You can also sign up through your bank’s mobile app if your bank participates on the Zelle network. If you’re enrolling through the Zelle app, they will ask you for your contact information, email address and mobile number. In addition, you’ll have to add a Visa or Mastercard debit card that’s linked to a domestic bank account.

You can use Zelle to send money to virtually anyone, as long as they have a U.S. bank account.

What is Venmo?

Venmo is owned by PayPal, and it is an application that allows individuals to send and receive money to each other and you can also use it to buy goods and services from a variety of companies (EX: Uber, Seamless and J. Crew).

Like Zelle, Venmo allows users to send and receive money by using someone’s phone number or email. Both users must have a Venmo account. If a recipient doesn’t have an account, they’ll have to create one.

The primaryl difference between Zelle and Venmo: With Venmo, you can hold a balance in your Venmo account. While Zelle on the other hand, transfers money directly between bank accounts. Venmo’s transactions takes place between Venmo accounts and balances.

One cool thing about Venmo is that it also has a social element. The app allows users to have friends on their timeline and see what their contacts are up to, like who they’re paying and for what. You can view, like and comment on purchases.

Zelle vs Venmo: Key differences

Zelle and Venmo are both offered to US customers to send and receive payments.

Zelle is free to use, and the main difference is that payments are sent directly from your linked bank account, to your recipient’s linked account or card. Venmo on the other  hand provides a digital wallet, which you can fund from a linked US bank account, credit, debit or prepaid card. You can then use that money to make payments to Venmo users. Many Venmo transfers are fee free, but there are charges for some transactions.

Here are a couple of key differences between the services:

• Zelle allows you to send and receive, but not hold funds. Venmo has a wallet function so you can hold a balance.
• Some banking apps have Zelle built in
• Venmo transactions take longer  than Zelle which is  instant.
• Venmo works only with a small number of authorized merchants

Both payment apps are fast, but Zelle is instant and free. Venmo funds take one to three business days unless you pay a 1% transaction fee for an instant transfer, which makes your funds available in minutes.

How Secure Is Zelle vs. Venmo?

One of the biggest drawbacks for most people when it comes  to mobile payment applications is the security.

However, you bank with peace in mind because both Zelle and Venmo have built-in security features that make money transfers safe. Zelle also has a team that monitors transactions and uses authentication to ensure your information is protected. Venmo also monitors transactions to catch fraud and both of the services use data encryption to protect personal data. Both services are safe, although Venmo could be considered more secure due to a PIN feature and by enabling multifactor authentication in the app.

Conclusion