The Purpose of Venmo and Zelle
If you’re not familiar with either of these, the purpose of digital wallets like Venmo and Zelle is to provide a simple and quick way to transfer money between banks and/or people. While they’re similar to electronic payment systems like PayPal, they’re designed for more personal transactions versus online commerce and business. Venmo is actually owned by PayPal but caters to a different user base. If you want to split a purchase between a dozen friends, you’d use a digital wallet like Zelle or Venmo. These are made to send money directly to other individuals. Think of them as a real wallet. You take money out to hand directly to a friend or family member. In the same vein, think of PayPal more like a credit card: you swipe your card to pay for purchases when you go shopping. One important thing to know is that both Venmo and Zelle are only available in the U.S. They’re not for international payments.
What Is Venmo?
At its core, Venmo is a social mobile payment app. The main purpose is to send and request money from family and friends. You can do everything in a few taps via the Venmo app, which makes it incredibly convenient for sending money in seconds. You’re free to keep a balance in your wallet to use immediately or link to a bank account or credit/debit card. If you don’t have enough in your wallet’s balance, the rest is taken out of your bank account or from your card, depending on your preferences. Technically, you can use Venmo to make actual purchases, but your options are limited. Businesses can set up a profile and accept Venmo payments. This is actually fairly common among local small businesses, individual sellers, and even fundraising events. According to Venmo, over two million merchants accept Venmo currently. Additionally, you can get a Venmo Mastercard debit card, which draws from your balance and bank account. Use your card anywhere in the U.S. where Mastercard is accepted. A final option is to scan QR codes within stores to make a purchase. The store has to have a Venmo profile to accept payments, however.
What Is Zelle?
The biggest issue when deciding a winner for the Zelle vs. Venmo debate is it’s easy to see the two as exactly the same. However, while they’re similar, Zelle is notably different from Venmo. Zelle is called a digital wallet, but you don’t actually keep a balance in it. Instead, you must link to a bank account. Otherwise, the process and purpose is similar. You send money directly to friends and family. You can also pay individuals who provide services, such as babysitters, a landscaper, the local handyman, or anyone else. One thing that makes Zelle incredibly useful is it’s already built in to many banking apps. In fact, your bank could easily already be partnered with Zelle, offering you a way to send money directly within your banking app. While both the sender and recipient need Zelle, you can both download and use the Zelle app even if your bank doesn’t currently participate. It takes a little longer for transactions to complete, but otherwise, it’s still an easy way to split checks, pitch in for a big gift, or pay your roommate your part of the rent.
Comparing Venmo vs. Zelle: Ease of Use
Now that you have a better idea of what each digital wallet is, it’s time to start comparing them to see which is best. First, let’s take a look at ease of use. Both Venmo and Zelle are mobile apps. All you need is the recipient’s email address or mobile number to send or request money. Zelle has the added benefit of being part of many major banking apps already, so you won’t need to download another app if this is the case. You can check Zelle’s site to see if your bank currently participates. Both require you to have a bank account to add funds. Once added, you can send and receive money from other users. The apps are both easy and convenient. A few taps is all it takes to complete a transaction. Both apps are available for iOS and Android devices. You can log in to your Venmo account via a browser, while Zelle is only available via the app. Winner: Tie
Venmo vs. Zelle: Fees
Naturally, these companies have to make money. While many transactions are fee-free, some do require a small fee.
Venmo Fees
Sending money from your bank account, debit card, or Venmo balance is free. So is receiving and withdrawing money using the standard transfer method. There aren’t any monthly or annual fees either. If you make an online purchase that accepts Venmo, you don’t pay a fee. If you want to send money to an individual with your credit card, there is a 3% fee. This fee does not apply to debit cards. Want your money in minutes? The Instant Transfer method takes out a 1.5% fee (minimum $0.25, maximum $15). This is a convenience fee. If you don’t mind waiting a day or two, withdrawals are free. If you’re depositing a check, fees range from 1% to 5% with a minimum $5 fee. However, this is a great way to get paid without standing in line at a bank. For businesses, there’s a 1.9% + $0.10 fee when receiving transactions. This is only for business accounts or when the sender states the payment is for goods and services. Venmo also lets you buy and sell cryptocurrencies. Anything under $25 is $0.50 per transaction. After that, fees range from 1.5% to 2.3%. The larger the transaction, the lower the fee percentage.
Zelle Fees
Zelle, on the other hand, doesn’t charge any fees. You can send and receive funds without fees. However, if you’re using Zelle through your banking app, your bank may charge a fee for the convenience. Winner: Zelle
Venmo vs. Zelle: Security
Both Venmo and Zelle encrypt all data and transactions to keep your accounts secure. Venmo also participates in the PayPal Bug Bounty program to proactively catch security flaws before they’re discovered by hackers.
Venmo Security
Even though Venmo is owned by PayPal, Venmo doesn’t offer buyer/seller protection. This is why the user agreement recommends you never send money to someone you don’t trust. In addition to a password, you can also set up a PIN on the mobile apps to provide an extra layer of security. If you lose your device, you can log in to your Venmo account via any browser and remove your device from the approved devices. This blocks the phone from accessing your account.
Zelle Security
While Zelle is called a digital wallet, fund are never stored there. This means your transactions are always insured by a financial institution. Transactions are encrypted to keep you safer. Initially, you sign in with your banking details (if you’re using Zelle via a bank), then set up a separate password to provide another layer of security. For mobile devices that offer fingerprint passwords, you can set up a fingerprint ID to log in. Winner: Tie, though Zelle does offer the benefit of working directly between bank accounts without holding funds in the app.
Venmo vs. Zelle: Transaction Limits
Each digital wallet has their own transaction limits. For many users, this is the deciding factor when it comes to choosing between Zelle and Venmo. In addition to limits, you’ll also want to know how long it takes to receive funds.
Venmo Limits
For most users, Venmo’s transaction limits won’t be an issue once you verify your account. Until you complete the verification process, you’re limited to spending $299.99/week. Other limits include:
Person-to-person payments: $4,999.99/week and $4,999.99/transactionPayments to merchants: $6,999.99/week and $2,999.99/transactionOverall combined limit: $6,999.99/week, which includes all transactions, including merchants and person-to-person paymentsTransferring from your bank to Venmo wallet: $1,500/weekTransferring to your bank account: $19,999/week and $2,999.99/transaction. If you’re not verified, the limit is $999.99.
Limits only apply for one week at a time. Once a transaction is over a week old, it no longer counts toward your limit. With standard transfers, you receive your funds within one to three business days. Instant transfers occur within 30 minutes.
Zelle Limits
For banks that work with Zelle, the limit is set by the bank. You’ll need to contact your financial institution to determine what limits might apply. If your bank doesn’t offer Zelle yet, you can still use the Zelle app. However, you can only send $500/week. There aren’t any limits on what you can receive. Transactions occur within minutes since money goes directly from one bank to another. Winner: Venmo
Venmo vs Zelle: Payment Methods
Payment flexibility is important when you want a convenient way to send and receive money. After all, you may not always have enough funds in your bank account to cover a sudden expense that a friend or family member may need.
Venmo Payment Methods
Venmo is easily the most flexible of the two. You can send funds from your bank account, debit card, or credit card. (A fee does apply for credit cards, though.) You can also transfer money to your Venmo wallet to pay directly from there. Get a Venmo Mastercard debit card for free to pay for purchases directly from your Venmo wallet and/or bank account.
Zelle Payment Methods
Zelle is a little more limited. You can only pay and receive money using your bank account or debit card. Only Visa and Mastercard debit cards are compatible. If your debit card doesn’t have a fast funds feature (check with your bank/provider), you won’t be able to receive funds within minutes. Winner: Venmo – having a credit card option is a nice bonus
Extra Features
Both Venmo and Zelle are mainly for sending and receiving money from friends and family. However, that doesn’t mean you can’t get a little extra from you digital wallet. Zelle keeps things simple. You send and receive funds to and from your bank account and debit card. There isn’t anything extra here. If you just want something simple, Zelle is the way to go. Venmo, on the other hand, has more to offer beyond the basics, such as:
Buy and sell cryptocurrency: you can get started with just $1, and Venmo works with Bitcoin, Litecoin, Ethereum, and Bitcoin Cash. Debit card: get a debit card directly through Venmo without going through your bank.Credit card: you can apply for a Visa-branded credit card through Venmo. It’s backed by Synchrony Bank, and there’s no annual fee. Interest rates vary based on your credit rating. As an added bonus, you get cash back on purchases.Add fun emojis and comments to transactions for a more social experience.
Winner: Venmo
The Winner Is …
Overall, the clear winner in the Venmo vs. Zelle battle is Venmo. Flexible payment options, few fees, and extra features give Venmo an edge over Zelle. However, Zelle is the perfect choice if your bank already supports using Zelle and you don’t have to send large amounts of money at a time.
Wrapping Up
Digital wallets are perfect for sending and receiving quick payments. Venmo and Zelle are two of the most popular options for person-to-person transactions. Use these browser extensions to help you save money when you shop online, and learn how to block suspicious contacts on Google Pay to avoid money fraud.
PayPal – Ideal for larger payments, businesses, freelancers, and international payments.Apple Pay – Link to your credit or debit card to send money fee-free. Use these troubleshooting tips if Apple Pay isn’t working.Cash App – Send payments for free using a debit card or pay up to a 3% fee for sending via one-day transfer or credit card. You can also pay with Bitcoin.Facebook Pay – You must link a debit card or PayPal account, but transactions are free.Wise – Ideal for international transactions, though fees are higher than most others.Google Pay – You only pay a fee with instant transfers. If you wait one to three days, it’s fee-free. See how Google Pay stacks up against Apple Pay and Samsung Pay.
