Back in the day, in earlier times when technology hadn’t fully grasped its way and was still in the evolving phase, people have come a long way from there. From home deliveries of almost anything available to supercomputers and electric cars, humans indeed have come a long way from where they were. Handling everything has become so easy, and the case with managing payments. Banks which were a thing of the privileged, are now being used by everyone. Today’s article- Who owns Zelle?
In earlier times, banks too had a traditional thing about them that needed a lot of explanation and understanding to complete a simple transaction with the bank. But, with evolving times, banks have evolved too. People can use their money and complete transactions with a simple click on their mobile phones today’s smartphones. Digitalization has effectively made its way through all the diverse fields of human existence, and they haven’t left payments or modes of compensation through that.
With digitalization into play, banks have explored their options and have led to their modernization. These days with only someone’s mobile number or account number or even email id could make bank transfers, and people don’t have to go to banks for this. Online payments, payments through UPIs, or online bank-to-bank transfers have eased out the life of a man. Primarily through the last year, in these unprecedented times of Covid19 when everything was closed and shops that even opened preferred the mode of the online transaction instead of cash, online money transfers grew multi-folds.
HISTORY OF ZELLE
As is rightly said, things grow when there’s competition, and someone is fighting to take your job. With the advent of time, there are so many options of online payment that people start figuring out which one they should use and which one is the best. One such option is ‘ZELLE.’ This is the United States-based digital payment network owned by ‘Early Warning Services.’ EWS or an early warning service is a private financial company that comes under the ownership of ‘Bank of America, Capital One, BB&T, JPMorgan Chase, PNC Bank, US Bank, and Wells Fargo.’ The company has its headquarters in San Francisco, California. This can transfer an online, electronic money transfer mode wherein money can be shared between 2 bank accounts, but both should be in the United States. The company was founded in 2017, and it was previously called “clearXchange.” Discovered in 2011, clearXchange offered payment services through a website owned by “Bank of America, JPMorgan Chase, and Wells Fargo.”
For payments to occur, the user or person should have an account at the respective banks that have participated in the payment process. The network also stored the history of transactions so that customers won’t have to request the details again. The lack of fees also acted as an advantage concerning the other online payment methods like PayPal, PopMoney, etc. The system also attached each bank account with a mobile number and the email address of the user. Hence, anyone who wishes to send money to any other account registered on the network has only to know the telephone/ mobile number of the recipient and the email address, and your problem is solved. The only thing that held it back was that sometimes the transaction could take as long as five days to complete.
In this cut-throat world of competition, time is also as precious as money, if not more. People can’t wait long to obtain their money and want something to fulfill their wish instantly. Since technology too had grown over these years, clearXchange found it best to develop something new that could survive in this competitive world. Therefore, clearXchange was sold to “Early Warning Services” in 2016. In less than a year, in 2017, Early Warning Services announced its new venture named Zelle payment service and a mobile application that enabled it to reach a much broader audience. They also took this big step to announce that clearXchange’s person–to–person accounts would be deactivated, which would be a new beginning.
THE ZELLE SERVICES
Finally, in 2017, Early Warning Services started this online payment portal and eventually became very successful and widely known. This company provides services to only those who the sender knows and trusts enough to send them something. The company isn’t liable and disclaims for anything that is being sold or bought on the portal. The members of the company can send money directly through their mobile number or email id. However, those of you who aren’t a member can also receive the money, but before that, as soon as the sender wishes to send the money, the receiver receives a request, and when it is allowed, only then the transaction comes into effect.
For any member to use the mobile application of Zelle or transfer the funds through the website, they need to enroll, and then only they can use the services. For registering, users must have a MasterCard or Visa debit card, which is issued concerning the US bank account. Since the application connects and uses the current bank account, you don’t need to open a new bank account in correspondence. Apart from this, all you need is an active mobile number or email address to initiate and successfully make the payment. Apart from transferring the money, there is also a unique feature to split the cost with your friends. This habit enables you to split the bill if you are out with your friends or decide to share a cab.
There are also some limits to how much could be transferred from one bank to another and the frequency of transactions allowed in a day. These are the limits imposed by banks and are also necessary considering that there might be fake transactions happening too, in an attempt to steal someone’s money, so locking the number of transactions enables you to monitor the transactions effectively. Since Zelle is owned by Early Warning Systems and uses distributed ownership, the limits vary from one bank to another. For example: if you have your accounts with Wells Fargo and are willing to make a payment or initiate a transaction, the limit is $2,000 per day to $20,000 per month. The transactions between users who are enrolled on Zelle occur within minutes, while if the recipient isn’t on Zelle, it usually takes 1 to 3 days.
THE CONTINUOUSLY EVOLVING PLATFORM
If you don’t evolve with time or continue offering something more to the customers, the company’s growth becomes stagnant. The procurements and attainments of Zelle speak for themselves, and it provides the blueprint on how to manage the collaborative business. Keeping up with the competitors and trying to stay ahead in the game is the kind of attitude that drives Zelle and explains its rousing success over time. For instance, Zelle is at pace with Venmo, but its ability to surpass it is causing a threat to Venmo and its staff. This ability came from the fact that it could convert existing bank clients into Zelle clients and add them to its database.
THE ZELLE Vs. VENMO BATTLE
One of the most significant competitors of Zelle is PayPal and its very unique and famous payment service – Venmo. Venmo is based on opinion polling and raising public awareness by having thorough engagement with customers. The difference probably would be in the kind of money Zelle processes which is around $75 billion (vast volumes of money transfers) in its very first year itself. However, the working model of both these services is quite similar, and therefore they are each other’s competition. It is apparent and understandable.
What makes them different from each other are the points mentioned below:-
- Zelle possesses direct integration and collaboration with the banking institutions, which Venmo lacks.
- The speed of money transfers on both these payment sites differs in terms of their processing speed. Zelle’s payments are processed more quickly in comparison to Venmo. Venmo tried to increase its processing speed, but then they started charging money, which also plays in favor of Zelle.
NEGATIVE CRITICISM
It hasn’t always been sunshine and rainbows because the company, like any other, received criticism when incidents of fraud started circulating the company. First, there were incidents of fraud wherein the money in the bank accounts of customers was compromised through social engineering. Adding to this, Zelle used to set up fraudsters by transferring the capital of victims’ accounts, thereby leaving them with little or no choice.
These things, however, come in the package deal, and Zelle took adequate measures to make sure this stopped happening. With such systems, a lot of time and effort is saved, and therefore people find it necessary to make effective use of such systems.
In earlier times, banks too had a traditional thing about them that needed a lot of explanation and understanding to complete a simple transaction with the bank. But, with evolving times, banks have evolved too. People can use their money and complete transactions with a simple click on their mobile phones today’s smartphones. Digitalization has effectively made its way through all the diverse fields of human existence, and they haven’t left payments or modes of compensation through that.
With digitalization into play, banks have explored their options and have led to their modernization. These days with only someone’s mobile number or account number or even email id could make bank transfers, and people don’t have to go to banks for this. Online payments, payments through UPIs, or online bank-to-bank transfers have eased out the life of a man. Primarily through the last year, in these unprecedented times of Covid19 when everything was closed and shops that even opened preferred the mode of the online transaction instead of cash, online money transfers grew multi-folds.