Cash is the Currency of the Past – Anonymous Quote
Every other thing is going digital these days. From jobs to interviews and from education to payments, people are shifting to the virtual world pretty quickly. And there is no reason why shouldn’t they; doing an activity that can be done virtually/digitally is both economical and efficient. Take, for example, payments; nobody wants the trouble of cash these days when you can make pay within a few clicks.
With the help of p2p payment apps like Zelle, users can now send or receive money at no charge within a few minutes. However, most people wonder how does Zelle makes money when it is charges nothing from users. The article will uncover the complete Zelle business model along with other important topics like how does Zelle work, cost to build an app like Zelle, and top Zelle alternatives. Let us start with some stats about Zelle app.
Zelle was a hit in the market since its launch in 2017 and has continued to grow since then. For reference, the platform processed $187 billion by facilitating 743 million payments in 2019 alone. Below are some Zelle app statistics and facts to further prove the app’s performance –
Zelle is a P2P payment app that allows its users to receive and send money from their registered bank account to another person’s account. Apart from digital payments, Zelle also allows users to invest their money into different assets with a few clicks and earn money within the app. The Zelle app collaborates with the US banks to offer the service and only serves the people with a valid US bank account.
The app is operated under Early Warning Services LLC and is located in Tempe, San Francisco, Scottsdale, and Chicago. The company is owned by seven major US banks, namely, JP Morgan, Wells Fargo, Capital One, Bank of America, Chase, BB&T, and PNC. Zelle has spread its wings all over the USA and has connected more than 1000 banks for instant, smooth money transfers.
Note that fintech apps like MoneyLion & Zelle are complex and only a trusted swift app development company, like Konstant Infosolutions, can build it. If you have any fintech app ideas with you, you can consult us anytime here.
Zelle is a digital payment platform that facilitates users to do account to account transactions without any charge and in a few minutes. The platform acts as a solution to conventional bank transfers that take a few days to complete each transaction.
The app works as an individual payment platform and also as a bank partner to send payments. Notably, if the receiver is a first time user, then it might take up to three days. The app’s revenue model is majorly dependent upon the bank’s commission since it doesn’t charge anything from users.
Users often wonder about the Zelle business model or how does Zelle makes money. Zelle app doesn’t charge any money from the users for sending or receiving money to other users. The app’s revenue model is charging commissions from banks to facilitate transactions. Further, merchants have to pay a 1% fee to Visa or Mastercard who can then share the resultant revenue with the issuing bank.
The company has not specified its fee structure publicly anywhere and thus it is presumed that a flat fee on each transaction is charged by the app to the banks.
The platform is a win-win for both users as well as banks. Users get a platform for seamless transactions without any fee or charge and banks get a bunch of user base and gain access to the market.
Note that although Zelle doesn’t any fee to the users, your bank might charge you a transaction fee. Thus, it is advisable to check the charges with your bank before sending or receiving payments.
The three primary functions of the Zelle App are as follows –
Note – The total transaction value of the Zelle app crossed $629 billion in 2022 with over 2.3 billion transactions.
So, this was the answer to how does Zelle makes money. It is important to understand that the app was made by 7 major US banks collectively to facilitate digital transactions and thus the motive was not to earn money with it.
With over 65 million active users and 2000+ partner banks as of 2023, Zelle has a vast network of banks as well as a huge user base to utilize. The company’s current business model relies on charging transaction commissions from banks. However, the platform has immense potential to implement further monetization strategies.
Zelle can introduce its own credit/debit cards for users. Apart from this, the app can also market other financial products by third party companies and charge them fees as well as earn affiliate commission.
However, introducing its own credit or debit cards will put Zelle in competition with its partner banks. Thus, it is essential for partner banks to agree to the Zelle cards.< Note – Zelle’s user base is anticipated to grow by 8% in 2024 to 73.2 million users<
Zelle app doesn’t charge any fee for sending and receiving money through the platform for users. However, it can be difficult for some users to understand the process and that’s why, below are the steps to send money with Zelle App and steps to receive money with Zelle App –
Users need to open the Zelle app and log in to their account. If you are an existing user of the application, then register on the app using a valid US phone number or email ID.
Once you are logged in inside the application, tap on the send money button. You can choose the receiver among your contacts or enter their email ID & mobile number manually also. Note that the receiver also needs to be registered on the app. Users can also use a partner bank’s network, such as Chase or Fargo.
Once you have selected the receiver to pay the amount, just fill the amount to pay and complete the transaction. There are additional options to fill the details of the transactions as to why the transaction was made for future reference. The option is optional and not mandatory for users.
Open the payment notification link will that is sent to your email ID
Choose your credit union or bank account on the opened page.
Follow the instructions on the page to receive payments.
The money transfer limit of Zelle app depends upon your credit union or bank. Most credit unions and banks have a daily transaction limit between $500 and $2500. The daily limit might be lower or higher, depending on your account and bank regulations. Further, if your bank is not partnered with Zelle or you’re not using a credit union, then the transfer sending limit is $500 per week, and the receiving limit is $5000 per week.
Apart from this, Zelle app also has a daily limit of 30 transactions for users to avoid any misuse or fraud. You can check with your bank to check the exact transaction limit and amount for better clarity.
Venmo is also a P2P payment app similar to Zelle that is used for sending and receiving money at no cost. The app works on the same business model as Zelle but charges a fee for receiving money through credit cards and instant money transfers. The platform also has some in-app purchases and allows bill splitting among different users.
Fact – Top Zelle Alternative, Venmo’s user base is expected to reach 68.3 million in 2024<
Formerly known as Square Cash, Cash App was launched in 2013 as an alternative of PayPal and Venmo by Block Inc. The peer-to-peer platform allows users to receive, send, and invest money without any hassle. The app charges fees on sending, receiving money over a limit, and a fee on certain transactions also. However, users can also invest in different assets using the platform.
Fact – Top Zelle Alternative, Cash App’s user base is expected to reach 50 million in 2024<
PayPal is the pioneer of payment platforms globally and was started in 1998 by Peter Thiel in California, US. The American financial company is used to send and receive money but charges on every transaction. The platform has a P2P payment system also known as PayPal.
Zelle enables paying directly from the bank account instead of the wallet. This feature limits its functionality as the money only moves between bank accounts.
Zelle allows the bank to bank money transfers. Cash app allows saving money across banks globally.
Zelle is completely free and does not charge any fee for sending and receiving money. PayPal inhibits a complex fee structure with many variables.<
| Criteria | Zelle | Paypal | Venmo | Cash App |
| Money transfer with Debit card | No | Yes | Yes | Yes |
| Money stores in account | No | Yes | Yes | Yes |
| More convenient and cheaper way to receive payments | Yes | No | No | No |
| Fees for rush transfer | No | Yes | Yes | Yes |
The mobile app development cost to build apps like Cash App or Zelle lies between $25000 and $60,000 majorly. However, the exact cost can vary depending upon several internal and external factors.
Since Konstant Infosolutions has been a top mobile app development company in India for the last 20 years, we have the required experience as well as expertise to build apps like Zelle or PayPal. We have the knowledge of the current mobile development trends and the functionalities required to make a successful P2P payment app.
The table below describes the mobile app development cost and the timeline required to build an app like Zelle depending upon the complexity –
| P2P Payment App Types | P2P Mobile App Development Cost | Timeline |
| Simple App | $25,000 – $35,000 | 2-3 months |
| Medium App | $35,000 – $45,000 | 4-7 months |
| Complex App (Highly advance features) | Starts from $50,000 | 8-12 months |
So, this was all about the Zelle payment app and its business model. We have covered a detailed explanation of how does Zelle makes money and its potential monetization strategies in the article. Apart from this, we’ve also defined how Zelle works, how to send money with Zelle app, and how to receive money with Zelle app. Building peer to peer payment apps like Zelle is a complex task due to complicated functionalities and out of the box UI/UX in the platform. Only top iPhone app development Companies, like Konstant Infosolutions, who have the past experience and expertise can develop fintech apps like MoneyLion or Zelle.
Zelle was founded by Early Warning Services LLC as a platform to facilitate digital transactions in the USA. The company is operated by 7 major banks in the USA, including JP Morgan, Chase, Bank of America, and Wells Fargo.
Zelle doesn’t charge any fees or commissions from its users to send or receive money using its platform. However, users might need to pay transaction charges set by their banks.
Yes, Zelle is completely safe to use and backed by 7 major US banks. The app has already partnered with 1000+ banks and credit unions to facilitate payments. In 2023 & 2022, 99% transactions on Zelle were free of any scams.
The app’s revenue model is charging commissions from banks to facilitate transactions. Further, merchants have to pay a 1% fee to Visa or Mastercard who can then share the resultant revenue with the issuing bank.
Some of the top apps like Zelle are Venmo, PayPal, Google Pay, Cash App, and Apple Pay.
The cost to build an app like Zelle starts as low as $25000 but depends majorly upon the exact requirements. There are multiple factors involved before deciding the final cost.
Manish Jain is the co-founder and Managing Director at Konstant Infosolutions. He is responsible for the overall operations of the company and has played a major role in bringing Konstant up from its humble beginnings and, with his immense energy and drive, transforming it into a globally trusted name in IT solutions.
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