Zelle for Business: How it works and which banks offer it

Zelle is a peer-to-peer (P2P) money transfer service and digital payment network. Although Zelle is designed for consumer banking, it can also be used for business purposes to accept linked customer payments. business bank account.

If your business bank supports Zelle (Bank of America, Chase, Wells Fargo, US Bank, and others do), it's a great option for fee-free contactless payments. However, this is probably not the only one, as Zelle lacks features that businesses may need (like accepting credit card payments). payment processing company Is required.

Who can use Zelle for business?

Thousands of financial institutions offer Zelle, but not all of them support the use of business accounts. To accept payments using Zelle, your business must: Open a business bank account with the corresponding financial institution.

The following banks support business use of Zelle.Select each name to see NerdWallet reviews for that bank business checking account.

use another one small business bank• You can check if you offer Zelle through your mobile banking app. If so, you can register using your mobile phone number and email address. If you already have a personal girlfriend Zelle account, you may need to use different contact information for your business.

How Zelle for Business Works

To use Zelle for your business, both you and your customers must set up Zelle via mobile phone or online banking. Customers don't have to be affiliated with the same bank as you, just another US-based bank that participates in the Zelle network. Customers also have the option to download the standalone His Zelle app and link their debit card.

The customer can then make the payment by following these steps:

• Please enter your Zelle business information. This company provides customers with Zelle contact information, typically a phone number or email address linked to their account. You can also show your customers her Zelle QR code.

• Enter those details. The customer uses your contact information and payment amount to send the payment. Zelle often sends a security code to first-time recipients via text or phone call to confirm the transaction.

• You will receive confirmation. The recipient (business owner or employee) will receive a notification from Zelle, usually by text message, that the payment has been received.

What are Zelle's corporate costs?

Zelle does not charge direct fees for business and personal transactions. Transaction limits and fees are determined by each user's bank, not Zelle, and may vary.

Generally, most business banks don't charge fees for Zelle, but they do place limits on transactions. for example:

• Bank of America caps the amount small businesses can send at $15,000 per 24 hours, $45,000 over seven days, and $60,000 every 30 days. Transactions are limited to 20 per day and 120 per month.

• tracking Users can send up to $7,500 per Zelle business transaction.

• Wells Fargo and US Bank limits vary by user and recipient.

Consumers whose bank or credit union does not offer Zelle can transfer up to $500 per week in the Zelle app via a linked debit card. To receive payments, businesses must register with her Zelle network bank.

Benefits of using Zelle for your business

Zelle doesn't charge businesses or customers any fees to send or receive money. Few banks also charge fees for using Zelle, but it's a good idea to check with your bank about potential fees and transaction limits before accepting payments.

Zelle and other P2P apps allow customers to pay without using cash, card, or even a checkout terminal. This also means you don't have to share sensitive account details like credit card numbers. If you're a cash-only business or have one-time in-person payments (such as public trade shows or markets), Zelle gives you an additional way to receive payments. POS system.

Unlike payment processors and other P2P apps, Zelle facilitates direct transfers between bank accounts. Zelle payments typically arrive within minutes.

Disadvantages of using Zelle for business

Zelle is a direct bank account transfer service, so you cannot connect a credit card for payments. Other P2P apps like Venmo and PayPal will link your credit card for a fee. Customers may want the option to pay by credit card. Most businesses will eventually need to rely on a payment processor for support.

Zelle does not protect payments made within its network and cannot cancel payments even if they are sent to the wrong person. The platform recommends that you only send payments to people you know and trust, make sure you use the correct email address, and proceed with caution before using Zelle for purchases. . For this reason, customers may prefer more secure payment methods that offer a money-back guarantee.

Purchases you make for your business on Zelle are also typically not protected, so don't send your funds until you're sure they're going to the right place.

Zelle cannot be used with international bank accounts. Both parties must conduct their banking transactions with a US-based financial institution within the Zelle network. Therefore, this service is not suitable for companies operating abroad.

Zelle Alternatives for Business

Venmo is a peer-to-peer money transfer app with features for small and medium-sized businesses. Businesses can register on the platform with a business account and integrate payments with Venmo's parent company. PayPal. Venmo also makes returns easy and generates more than $600 a year in revenue for business users. 1099-K tax form, It's different from Zell.

Unlike Zelle, this service charges a sales fee (1.9% plus 10 cents per transaction) and does not send money directly to your bank account. The fee for instant transfers is 1.5% of the amount transferred, with a minimum fee of 25 cents and a maximum fee of $15. You can avoid additional transfer fees by choosing to receive your money within 1-3 business days.

cash app is a peer-to-peer app that integrates with Square, a POS system popular with many small businesses (both services are owned by Block). The platform can share data, and Square checkout devices can display Cash App QR codes for direct payments.

There are no platform-specific fees, just Square's standard processing rate of 2.6% plus 10 cents for card-present transactions or 2.9% plus 30 cents for card-present transactions. For business accounts, instant bank transfers are free. Cash App offers chargeback protection and does not add chargeback fees.

If you do business banking with Chase, you can use your bank's built-in payment processing service to accept credit and debit card payments directly into your bank account. As with using Zelle for business, these payments typically appear in your account on the same business day (or the next business day if you make the payment during evening or weekend hours).

However, this service is not free. You pay 2.6% plus 10 cents for each tap-to-pay transaction and 3.5% plus 10 cents for manual transactions and payments made through links you send. If you need credit card swiping hardware, you'll need to purchase it separately.