One of the fastest and easiest ways to send money, Zelle is revolutionizing the payment landscape for individuals and business owners alike. Are you ready to start sending and receiving funds using just an email address or mobile phone number? Then Zelle for business might be the perfect solution for you.
This is a practical guide on how to use Zelle for your small business. We’ll cover what it is, how it works, and answer some of the most common questions about the service. So, let’s get started.
What Is Zelle?
Zelle is a payment service that was launched in 2017. It’s run by a company called Early Warning Services, LLC, which is owned by some of the biggest banks in the business.
Since Zelle is US-based, you need a U.S. bank account to use it. You can only use Zelle for your business if your bank or financial institution offers the service for eligible business accounts. You can see a full list of member banks here, but some notable ones include:
- Bank of America
- Chase Bank
- U.S. Bank
- Wells Fargo
- Union Bank
Keep in mind that not all banks that offer Zelle for consumer accounts also offer Zelle business accounts.
Each individual bank that offers Zelle has a lot of control over the service. For this reason, it’s up to your online banking institution to decide how much they want to charge you for it.
The plus side? Since Zelle only works with pre-vetted member banks, you can transfer money in minutes.
How Does Zelle Work?
Zelle uses the Zelle Network to transfer money from over 400 member banks and credit unions. Enrollment to the Zelle app is easy. Just check your bank’s mobile banking app or website to see if you have an eligible bank account. You’ll need an email address and U.S. mobile number to create a Zelle business account. These can’t be the same as the ones you use on your personal account.
Alternatively, you can download the Zelle app on your mobile device from Apple Store or Google Play. But you can’t enroll in Zelle for business with just a debit card. You need a credit card and a business checking account to create a Zelle account for your small business.
Once you’ve created an account, all you need is a customer’s email address or mobile number to receive money. You can also send money using a recipient’s email address or phone number.
Zelle communicates between banks just like PayPal or Venmo, so you don’t even need a routing number to start sending money. You can use Zelle to send and request money or split bills. Just use your smartphone to receive payment requests and payment notifications from your bank’s app.
Say you’re working with a local business owner to co-produce an event and want to split the set-up costs. If you both use Zelle, you can directly split the bill with them in the app. Zelle even lets you customize how much each account will pay.
So, it’s no problem if you want to spring for an extra table or the more expensive appetizers. You’ll just pay more when you split the bill.
Benefits of Zelle for Business Accounts
There are a number of reasons to consider using Zelle for business. Check out the following.
It’s cheaper for you
The biggest benefit of Zelle for business accounts? You can send and receive money in minutes, with no cost attached to the service. However, while Zelle charges no fee, your bank may charge you for Zelle transactions. So, you’ll want to do your research before you use Zelle to process too many transactions.
It enables you to go contactless
Contactless payments have been increasing in popularity for years now, but the 2020 pandemic has certainly taken adoption to a whole new level. Many consumers prefer to limit cash handling and physical contact, and Zelle’s payment solutions enable shoppers to pay for their purchases with zero contact with the merchant.
You can capitalize on digital payments
You’ll also have the ability to add an optional note when you send and receive payments. This can help you categorize business transactions when you do your accounting.
The value of total transactions from digital payments is expected to reach $1269 billion by 2021. This indicates just how popular digital payments are right now. So, if you don’t enable them for your business, you’re leaving serious money on the table.
It’s a convenient way to transact with your customers
There’s a reason digital payments are growing: they’re very convenient for customers. A customer doesn’t have to rifle through their pockets or purse to find their wallet and pull out the right card. Instead, they can click a button on their phone. It’s quick, simple, and more secure for them. Having such a breezy experience at checkout will leave the customer with a memory of a good experience, inclining them to long-term loyalty.
Opens you up to a broad user-base
A lot of people use Zelle. As of 2023, over 100 million people have access to use Zelle- regardless of whether their mobile device is Apple or Android. Taking Zelle allows you to tap into this pool of people.
Potential Disadvantages of Using Zelle for Business
While Zelle can certainly be an easy and convenient payment option for you and your customers, you also need to be aware of the potential drawbacks of using the service.
These may include the following.
Inconsistent payment experience
Banks have varying policies and limits with Zelle. This is particularly true when it comes to how much money you’re allowed to send or receive. For example, Bank of America caps transfers at $15,000 per 24 hours and $60,000 every 30 days. Meanwhile, Chase imposes a limit of $40,000 per month, and users can send up to $5,000 per transaction.
The lack of consistency can create confusion among customers and businesses alike, so you need to be mindful of the policies of your bank.
Limited to U.S. bank account holders with a U.S. mobile number
Zelle only works for people with accounts and mobile numbers that are based in the United States, so if you’re selling to tourists, you can’t use Zelle as a payment method.
No purchase protection for consumers
Zelle transactions cannot be reversed, which limits your customers’ purchase protection. This shouldn’t be too much of an issue if you already have an established relationship with your shoppers.
That said, some customers may be wary about using the service. If this is the case, you can always direct them to another payment method.
Refunds are cumbersome
Since you cannot cancel or reverse a Zelle transaction, refunds are a hassle for you and your customers. Unlike credit cards, which allow shoppers to receive refunds on the payment card they used, you can only refund Zelle purchases by initiating another transfer (this time coming from your account) or by using an alternative payment method.
Transaction limits
Zelle limits the amount of money that can be sent at one time. For businesses dealing in expensive goods or high-value transactions, this can be a major downside. In order to make a large purchase the customer would have to send multiple transactions.
International use is iffy
Zelle operates primarily in the US and does not offer much availability internationally. If you do a lot of business internationally, Zelle may not be the best option for you to take payments.
Final Words
Zelle is a quick, cheap, and easy way for small businesses to send and receive money. It’s a great payment option if your bank doesn’t charge to process Zelle transactions. However, some banks do charge a substantial markup. If this is the case and you don’t want to switch banks, you might want to try working with a different payment processor.
Payment Depot streamlines your credit card transactions by equipping you with the latest payment technologies and terminals. Plus, with Payment Depot, you won’t encounter hidden fees thanks to our transparent, interchange plus pricing model, ensuring you always know what you’re being charged. Contact us to get started today.
Quick FAQs about Zelle
Q: What is Zelle and how can it benefit my business?
Zelle is a digital payment service that allows businesses to send and receive money quickly using only an email address or mobile phone number. It offers instant transfers through a network of over 400 U.S. banks, making it a fast and convenient option for handling business transactions without the need for cash or checks.
Q: How do I set up Zelle for my business account?
To set up Zelle for your business, you must have a U.S. bank account with a participating financial institution. Check if your bank offers Zelle for business accounts through their app or website. You’ll need a separate email address and U.S. mobile number, different from those linked to your personal Zelle account, as well as a business checking account.
Q: Are there any fees associated with using Zelle for business?
Zelle itself does not charge any fees for transactions. However, some banks may impose fees for using their services with Zelle. It’s important to contact your bank to understand any potential charges before processing transactions.
Q: What are the transaction limits when using Zelle for business?
Transaction limits vary by bank. For instance, Bank of America allows up to $15,000 per day and $60,000 per month, while Chase permits up to $5,000 per transaction and $40,000 per month. Always check with your bank for specific limits to manage your transactions effectively.
Q: Can Zelle be used for international transactions?
No, Zelle is only available for transactions within the United States. Both the sender and recipient must have U.S.-based bank accounts and mobile numbers. If your business deals with international clients, you may need to explore other payment solutions.
Q: Is Zelle a secure payment method for businesses?
Zelle is considered secure as it works with pre-vetted banks and requires enrollment through your bank’s secure online platform. However, since transactions cannot be reversed, it’s crucial to double-check recipient details before sending money.
Q: What should I do if a customer prefers not to use Zelle?
If a customer is hesitant to use Zelle, offer alternative payment methods such as credit card payments, PayPal, or traditional bank transfers. Providing multiple payment options can enhance customer satisfaction.
Q: How can businesses handle refunds with Zelle?
Since Zelle transactions are non-reversible, refunds must be processed as new payment transactions from your account back to the customer. Alternatively, offer refunds through other methods, such as issuing a check or using a different digital payment service.
Q: Can businesses pay other businesses using Zelle?
Yes, businesses can use Zelle to pay vendors, suppliers, or other businesses that are enrolled in Zelle. Ensure that both parties are registered with Zelle through their respective financial institutions.
