A Practical Guide To Using Zelle For Business
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.
FAQs about Zelle for Small Business Owners
Q: What types of transfers are allowed on Zelle?
You can use Zelle for P2P, B2B, and B2C transactions. Only one side of the transaction (meaning you) needs a Zelle account to use the service. However, you need to have a checking account or the Zelle app—savings accounts and credit cards won’t suffice.
Q: Is your money protected on Zelle?
Zelle transfers are extremely secure. Your money is sent through an ACH transfer, so it never sits in a third-party bank.
Zelle transactions are FDIC (Federal Deposit Insurance Corporation) insured. However, FDIC insurance doesn’t mean they offer a protection program against fraud. In fact, Zelle doesn’t offer purchase protection beyond what’s offered by your bank. So, they recommend sending only authorized payments to people and institutions you fully trust.
Q: How does Zelle compare with other digital wallets?
Unlike Venmo, one of its competitors, Zelle doesn’t require that you send money from the app to your bank. Eliminating that step means you get paid faster. And they don’t take a percentage of your profits to transfer money immediately. All you need is one eligible bank account to get started.
Q: Does Zelle integrate with accounting software?
Zelle for business does not integrate with accounting software. However, transactions will be logged in your business bank account, so you can easily enter them into your accounting software.
Q: What kind of transfer restrictions are there on Zelle?
Your small business bank account provider will determine your transfer and transaction limit. Zelle sets no restrictions, so what you’re allowed to transfer is entirely up to your bank.
Q: How should you request and send money with Zelle?
Anyone with a member bank account can make payments using Zelle. Those without a member bank account can still use Zelle by downloading the Zelle app. You’ll usually receive payments to your deposit account within a few minutes. However, since Zelle payments are processed almost instantly, you can’t cancel a payment once it’s been processed.
Q: How do you know if your business customers can use Zelle to send payments?
To determine if your customers can transact via Zelle, ask them if they’re enrolled with the platform. If yes, they should be able to pay by accessing Zelle using their bank’s mobile app. If they can’t enroll or don’t want to do so, you won’t be able to transact via Zelle.
Q: How do you use Zelle for business?
You might be wondering if you can use your Zelle business account to send and receive personal payments. The short answer is “yes.” However, you’ll want to double-check with your bank beforehand, if there are costs associated with it. Zelle for personal accounts is free, so there’s no reason to pay if you don’t have to.
Setting up a Zelle account for your small business is pretty intuitive. All you need to do is scroll down to the “QuickPay with Zelle” section of your bank’s app or website. You’ll need to request a verification code the first time you use it. Zelle will send the code to your iPhone or Android device for quick and easy confirmation.
It’s incredibly important you use the correct email address when you use Zelle to process business transactions. Remember, Zelle payments can’t be canceled once sent. So you can lose a lot of money if you send a payment to the wrong person by mistake.
Overall, though, Zelle for small business accounts should save your company money on payment processing. It’s a free service, but your bank may charge a markup on Zelle transactions. Fortunately, you can always switch to a bank or lender that doesn’t charge for Zelle payments.
Q: How long does it take for funds to transfer through Zelle?
In most cases, the recipient will receive the funds in their bank account as soon as the sender initiates the transfer. However, it’s important to note that there may be occasional delays due to factors such as network congestion, technical issues, or the recipient’s bank processing times.
Q: Can businesses set up recurring payments with Zelle?
Businesses cannot set up recurring payments directly through Zelle. Zelle is primarily designed for person-to-person transfers and lacks advanced features specifically tailored for businesses, such as recurring payments or invoicing.
Q: How much does it cost to use Zelle for business?
Zelle does not charge businesses a fee for using its service directly. However, it’s important to note that individual banks or financial institutions may have their own fees or charges associated with business accounts or specific transaction types.
Q: How does Zelle handle dispute resolution for businesses?
Zelle, as a peer-to-peer payment service, doesn’t have a formal dispute resolution process for businesses. If a business encounters a payment dispute or issue related to a transaction processed through Zelle, they recommend you directly engage with the customer involved.
However, while Zelle itself does not offer a formal dispute resolution process for businesses, individual banks or financial institutions that integrate Zelle into their platforms may have their own dispute resolution mechanisms or customer support channels. So in the event of a dispute, you can look into your bank’s methods of resolution.
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 membership-style payment processing. Click here to learn how Payment Depot helps members save $800+ on credit card processing every month.