You may have seen the commercials for Zelle, the new payment app. They aren’t very specific about what Zelle does, or how it does it. Questions that may pop into your mind are things like, how does Zelle work? Is Zelle legit, or a scam? Why would I bother to use Zelle?

If you already use a payment app, your questions are probably more like, is Zelle better than Venmo, or is Square Cash better than Zelle? It’s time for our Zelle review.

Zelle Reviews

Zelle is actually two products from the same company. One version of Zelle is the behind the scenes payment system backed by, and used by, several American banks inside of their own banking apps. This is the part that the commercials claim is “already on your phone,” or “already in your banking app.” Since Zelle actually works directly with various banks, they play nicer with Zelle than maybe with others including transferring money with no fees, and allowing “instant” transfers and withdrawals.

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The second piece of Zelle is a stand-alone money transfer app that isn’t inside of your banking app. The idea for both products is roughly the same. Your Zelle account gets linked to a bank account and that bank account can send and receive money via the Zelle app. If you already have a banking app on your phone and it already uses Zelle, you don’t really gain anything by getting the standalone Zelle app. However, if you have multiple banks, or if your bank or credit union doesn’t use Zelle, then the standalone app lets your play ball.

How Does Zelle Work?

Essentially, Zelle works by acting as a middle man between you and whoever you are paying’s banks. Traditionally, you can’t transfer money directly from your checking account to a friend’s checking account, even if you both have accounts at the same bank. With Zelle, the transfer works as withdrawal from your account to Zelle (which you authorized by setting up and using Zelle), and then a deposit from Zelle to the payee account (which they authorized by setting up and using Zelle). This brings us to the Zelle catch number one.

Zelle What’s the Catch?

In order to use Zelle you, and whoever is getting the money, both have to be setup and using Zelle. I can’t use Zelle to send money to my mom because she uses a credit union from work that isn’t a Zelle partner, and she certainly doesn’t have Zelle on her phone. None of the big Colorado credit unions like Bellco Credit Union, Public Service Credit Union, or Elevations Credit Union currently support Zelle. If you try and use Zelle to send money to someone who doesn’t have Zelle, they actually get an email with a link to setup Zelle. If they don’t signup for Zelle within a certain amount of time then, the transfer is cancelled and you get your money back.

The way around not having the right bank is to link a debit card from a non-Zelle supporting bank or credit union to the standalone Zelle app. My mom isn’t going to do this, of course, but if you have friends with Zelle and you want to play ball without opening a new bank account, this is how you do it. This brings us to the second catch.

In order to use your debit card with Zelle, it has to be “fast funds enabled.” There is no real way to see if your card qualifies other than trying to set it up and seeing if you get an error.

The third catch to Zelle is that even if both of us have it set up, one of us still has to have a bank or credit union that supports Zelle, so we can’t both be using the debit card trick, or it won’t work. The reason is that Zelle doesn’t actually take your money and hold it, like Venmo does. Instead, it stays with one of the bank’s during the transfer. For that to work, one of the banks has to hold the money.

The good news is that there are no fees for using Zelle, so at least that isn’t a catch, and we know that Zelle is not a scam unless it is also scamming 30+ banks.

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How To Use Zelle?

How do you use Zelle? Whether it is via the standalone app or the built-in Zelle banking app, you send money via an email address or phone number. It has to be the email address or phone number associated with the person’s Zelle profile, so it can’t just be any of the person’s email addresses or phone numbers. For example, if you know a person’s work email, but that account is not associated with their Zelle profile, then you can’t use it to send them money. Using the phone number is probably the most straightforward. And, for actual friends, you likely already have that information in your phone anyway.

In the commercial where the guy uses Zelle to buy food from random fundraising stands, I wonder what email or phone number they are using? Is the coach giving out his email or phone number to strangers so that they can pay him? In reality, for now, Zelle is probably best for transferring money to and from people you actually know. Remember, Zelle is a transfer of money it is not a purchase like with a credit card. There are no disputes or charge backs with Zelle.

If you don’t know the person, or aren’t sure you will get what you paid for (for example, items bought from an on-line bidding or sales site), we recommend you do not use Zelle for these types of transactions. – From the Zellpay.com website.

That being said, assuming you and whoever you are sending money to are both enrolled and setup in Zelle, the transfer process is actually pretty easy. Basically, the app uses your contacts list to give you a list of people to send money to. Again, since sending by phone number is an option, this is a nice touch. Then, you input how much money to send, and it gets transferred.

Theoretically, the transfer happens in “minutes.” This all seems to work, so long as you are already setup on both ends. Most of the problems with Zelle come from getting it setup. Once you (and whoever you are transferring money to) are past that hurdle, it starts to fulfill it’s promise of being easy and simple.

Trouble With Zelle

The Zelle reviews in the App Store are dreadful. Many complain about the support, and some even go so far as to allege a big Zelle scam. In other words, this isn’t always as easy as it seems.

The biggest issue is getting setup. The company makes it sound like anyone can use it with just a few clicks, when in fact, there are many limitations both technical and otherwise. Remember, even if you have an existing banking app with a supported Zelle partner company, you still have to setup a Zelle profile. It isn’t integrated. Like most things, this works best if you decide to do it ahead of time, when you aren’t rushed. Trying to set it up in order to pay someone now, is a recipe for disappointment.

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For security purposes, you cannot use Zelle over WiFi. That’s all fine and good, but that means you need to have a good, solid data connection to use it. And, if your phone number was linked to another account, including a ClearXchange account, you need to call the company to disconnect it. Also, changing where the money goes when someone sends it to you requires a phone call as well.

Also, if you are not already setup on Zelle when someone sends you the money, it can take several days before the money is available to you, especially if you have to set it up through a debit card instead of a participating bank.

Zelle Security

Is Zelle safe?

Well, that depends on how you feel about the security of your phone. Like Apple Pay, or any other banking or payment app, hacking into your phone from the outside probably isn’t a huge concern. But, if someone gets a hold of your phone and can log in, then they are in business. It takes a password to use Zelle, but that is only as safe as your password. An angry spouse or significant other might be able to use your “usual” passwords to rob you blind, for example.

The security within Zelle is as good as any other banking app. The weakness is if someone can get into it, they have access to your whole bank account up to the maximum amount Zelle allows you to send.

Zelle Review – 3 Stars

As is so often the case with banking and payment apps like this, the answer to whether or not Zelle is worth it depends on why and how you plan to use it. It works a lot better as part of a banking app if you bank with one of the banking partners, than as a stand alone app.

For me, I don’t often have the need to pay people money like this. Maybe it’s a function of being in my mid-40s, or a function of socioeconomic status. If I owe someone money, it is usually because they bought something for me because we are doing it together, i.e. tickets to Denver Comic-con, for example. That also means that I’ll see them, like at Comic-con, and I can grab a $100 out of the ATM and just hand them some cash. If we are splitting something like dinner, most of my friends and I work on the “I’ll get the next one” system.

I suppose for college students, or those with a tighter budget, waiting a few days, or even weeks to get the $50 someone owes you isn’t an option, and I guess that this is one of many ways to be able to pay someone quicker.

And, maybe, I’m just too old. I don’t mind carrying a wallet with some credit cards and a couple of $20 bills in it. That covers me in 99.99% of all my spending cases. But, maybe your average 20-something doesn’t roll like that.

Once it is setup, it works just fine, so that might be a 4-star app. However, so many people have so many issues with setup that I can’t rate it that high. For people like me, this app is a waste of space, and yet one more way for someone to hack into my money should I lose my phone, so that makes it a 2-star app for me. However, it isn’t fair to downgrade an app just because I don’t happen to find it useful. I mean, it does what it says, so if you think that would be useful, then who am I to tell you not to use it? If you think this will come in handy, and the people that you are likely to pay have it too, then it is probably worth it. If you are looking to do a one-time thing, then I’d just stick with heading to an ATM to get some cash.

So, in the end, I give Zelle 3 stars for this review.

Final answer.