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Zelle: The Convenient and Risky World of P2P Payment Apps

and Overview of Zelle

Have you ever found yourself in a situation where you needed to send money to someone but did not have cash or access to a bank? With the advent of peer-to-peer payment apps like Zelle, transferring funds is now easier than ever before.

Zelle is one of the most popular P2P payment apps, widely known for its functionality and free-of-charge services. However, despite its numerous benefits, it is important to be aware of the risks that come with using the app, including malicious accounts set up by scammers to rip off unsuspecting victims.

Zelle’s Features and Functionality

Zelle has quickly become one of the most preferred P2P payment apps with its fast and easy payment features. Unlike other payment platforms, Zelle offers free transactions, giving its users the ability to transfer funds without any extra charges.

To use the app, you only need to link your bank account to it and then connect with your friends and family who are also using the service. You can then send or receive money with ease, avoiding the hassle of using cash or waiting for a check to clear.

By using Zelle, you can send money to recipients in a matter of seconds. Simply enter the recipient’s phone number or email address and the amount you wish to send.

The recipient gets a notification via their preferred method, and the transferred funds appear in their bank account within minutes. Zelle’s features and functionality have made it a game-changer in the P2P payment sector.

Zelle’s Scams and Drawbacks

One of the drawbacks of Zelle is the risk of being scammed. Scammers set up malicious accounts and pose as legitimate sellers to take advantage of unsuspecting victims.

They often ask for upfront payments, which they never deliver upon receiving the money. To avoid such scams, always ensure that you are sending money to a known and trusted recipient and never pay upfront until you are sure what you are paying for is genuine.

Another drawback is the absence of a payment dispute process. Once you send money through the app, it’s gone for good.

Furthermore, if you accidentally send money to the wrong person, there is no way of getting your funds back unless the receiver agrees to return the money voluntarily. This is why it’s very important to make sure that you double-check the recipient’s phone number or email address before sending money using the app.

Zelle’s Background and Growth

Zelle was founded in 2017 by Bank of America, JPMorgan Chase, and Wells Fargo, and fully acquired by Early Warning Services in 2018. Before being rebranded as Zelle, the app was known as clearXchange.

The founders of the app had one primary goal in mind, to provide banking customers with a faster, more convenient way of transferring funds. By using Zelle, you can send or receive money without the need for an intermediary, saving you time and money.

Zelle has been growing rapidly since its launch, with its annual transaction volume crossing over 1 billion dollars in 2018. In 2019, it became the biggest P2P payment app, overtaking

Venmo by a wide margin in terms of transaction volume.

The growth of the P2P payment app over the years has enabled it to partner with hundreds of banks and credit unions, bringing the convenience of Zelle to a much wider audience.


In conclusion, Zelle has become one of the most widely-used P2P payment apps, thanks to its ease of use and free-of-charge transactions. Despite the benefits, it’s important to be aware of the risks that come with using the app, including the possibility of being scammed by fraudulent accounts.

Always double-check the recipient’s phone number or email address before sending any money. As the adoption of P2P payment apps continues to grow, Zelle’s user-friendly platform and rapid growth make it an attractive option for those who desire a convenient, faster way of transacting with others.

Zelle’s Competitors

In the world of payment apps, Zelle is not alone. Several other peer-to-peer payment platforms compete with Zelle, offering unique features and varying levels of convenience.

In this section, we will take a closer look at some of Zelle’s notable competitors.


Founded by Andrew Kortina and Iqram Magdon-Ismail in 2009,

Venmo is one of the earliest payment apps that gained significant popularity.

Venmo stands out due to its social aspects.

It allows users to add comments and emojis to their transactions, making it a fun way to send and receive money. Unlike Zelle,

Venmo offers cashback rewards to its users, giving them an incentive to transact more.

Venmo’s user-friendly platform has made it a popular choice among millennials and college students. However,

Venmo charges a fee for instant transfers, which could limit its appeal for those looking to make quick payments.

Cash App

Developed by Square, Inc.,

Cash App is another popular payment app known for its digital wallet and cryptocurrency features. Its founder, Jack Dorsey, envisions

Cash App as a tool that could revolutionize the world of finance.

Apart from sending and receiving money,

Cash App enables users to invest in bitcoin, stocks, and other cryptocurrencies.

Cash App stands out due to its growing user base and its integration with other Square products.

However, its cryptocurrency features could deter some users who are not yet familiar with the world of digital currencies.

Apple Pay

Apple Pay is a mobile payment service developed by Apple Inc. It uses NFC technology to enable contactless payments.

The payment app has been integrated into Apple’s wallet app, alongside Apple Cash and other cryptocurrencies.

Apple Pay stands out due to its convenience, as transactions could be completed without the need for a physical card.


Apple Pay is only available to Apple device owners, limiting its reach to a specific demographic.


PayPal is one of the earliest and most well-known payment platforms, enabling online payments since the late 1990s. With over 30 million merchants worldwide,

PayPal has developed a formidable reputation in the world of financial technology.

PayPal stands out due to its immense transaction volume and its globally-accepted payment platform. However,

PayPal charges a fee for its services, making it less attractive to those looking for free-of-charge transactions.

Google Pay

Formerly known as Android Pay and Google Wallet,

Google Pay is owned by Google and operates as a mobile payment service exclusively for Android users.

Google Pay enables users to make payments by simply tapping their Android smartphones against compatible payment terminals.

Google Pay stands out due to its high transaction value and its legal battles with tech giant Apple over the use of its technology. As a result, it could appeal more to Android users who prefer Google’s ecosystem.


Chime is a neobank and technologically-enabled bank that offers unique features like early access to direct deposit funds and cashback rewards for purchases.

Chime has simplified banking for its users, offering them a hassle-free way to manage and transact with their money.

Chime’s user-friendly platform has made it a popular choice among those who prefer online banking. However,

Chime does not offer traditional bank account protections like chargebacks, which could limit its appeal to some users.

Samsung Pay

Samsung Pay is a mobile payment platform designed for Samsung smartphone users. It stands out due to its integration with LoopPay, a technology that enables users to transfer money to a payment terminal using their smartphones.

Samsung Pay offers cashback rewards to its users, making it an attractive option for those seeking financial incentives. However, like

Apple Pay,

Samsung Pay’s reach is limited to a specific group of smartphone users.

Honorable Mentions

Apart from the payment apps listed above, there are several other neobanks and financial service providers that deserve honorable mentions. Current, Revolut, Robinhood, and SoFi are just a few of the many neobanks that offer users unique features like early access to direct deposit funds, cryptocurrency trading, and commission-free stock trading.

These neobanks have revolutionized the banking sector, providing users with a convenient and flexible way to manage their money. Tech giants like Facebook, Amazon, and Meta Pay are also making significant inroads in the payment space.

Facebook’s Meta Pay aims to integrate payments into the Metaverse, providing users with easy access to financial services within virtual reality. Amazon Pay is Amazon’s payment service that enables users to make payments using their Amazon account.

With Amazon’s vast reach in the e-commerce space, Amazon Pay has the potential to grow rapidly. However, for now, it remains less popular than other payment apps and platforms.

Traditional banks like Chase Pay also deserve honorable mentions due to their efforts to keep up with the changing times. Chase Pay offers instant transfers and traditional bank account protections like chargebacks.

While traditional banks may have struggled in the early days of the P2P payment revolution, they are now catching up, providing users with a diverse range of options for managing their money. In


In conclusion, Zelle is a popular payment app that competes with several other peer-to-peer payment platforms.


Cash App,

Apple Pay,


Google Pay,

Chime, and

Samsung Pay are some of its notable competitors. Honorable mentions go to other neobanks and financial service providers, tech giants like Facebook and Amazon, and traditional banks.

Each of these payment apps and platforms brings its unique features and conveniences that users can choose from based on their needs and preferences.

P2P Payment Apps and Scams

Peer-to-peer payment apps provide unparalleled convenience, making it easier than ever before to transfer funds to friends and family. Indeed, P2P apps like Zelle have revolutionized the payment industry, enabling users to send and receive money with just a few taps on their smartphones.

However, the convenience offered by these payment apps also comes with risks, specifically the potential for scams that could result in lost funds. Scammers are known to set up fraudulent accounts on P2P payment apps, posing as legitimate recipients.

They use a variety of tactics to trick their targets into sending them money, ranging from unsolicited requests for payment to false promises of goods or services. Scammers often request that funds be sent via instant payment, leaving victims with little time to react.

Once the funds have been sent, it becomes significantly more challenging to get them back. One common scam involves the sale of goods online.

The scammer poses as an individual selling goods online, and the victim agrees to purchase the items. The scammer then requests payment via a P2P payment app, and once the payment is made, they disappear, never to be heard from again.

Since transactions via P2P payment apps are non-reversible, or only reversible under specific circumstances, the victim is left without their money and with no recourse to recover it. Another method involves the use of fake invoices.

The scammer sends a fake invoice to the victim, posing as a legitimate business or vendor. The victim then makes a payment via a P2P payment app, thinking that it is for an actual service or product they have received.

Once the payment is made, the scammer disappears, and the victim is left to deal with the aftermath. To avoid becoming a victim of P2P payment app scams, there are certain precautions you can take.

Firstly, never send money to someone you do not know and trust. If you have any doubts about the legitimacy of a transaction, it is best to contact the supposed vendor/business to confirm before making any payments.

Be cautious of unsolicited messages, and never agree to make any payments until you have verified the seller or vendor as legitimate. Secondly, avoid making payments via instant payment methods.

Instant payments are usually non-reversible, which means that if the payment is made to a scammers’ account, it can be difficult, if not impossible, to recover the funds. Consider using payment methods that have a chargeback option or some other form of protection, as this can provide additional recourse in case of fraud.

Thirdly, always update the payment app whenever there is a new version or update available. This is because payment apps frequently improve their security measures to protect their users from scammers and fraudsters.

In conclusion, P2P payment apps like Zelle offer unparalleled convenience and speed, but they also come with risks. Scammers are known to exploit vulnerabilities in payment platforms to dupe unsuspecting victims out of their money.

The best way to protect yourself from these scams is to be cautious, verify the legitimacy of all transactions, and avoid instant payment methods. By following these tips, you can better protect yourself from fraud and enjoy the benefits of P2P payment apps with confidence.

In conclusion, the rise of P2P payment apps like Zelle has revolutionized the way we transfer money, offering convenience and speed. However, it is crucial to be aware of the potential risks, such as scams that can result in lost funds.

Scammers often exploit vulnerabilities and trick users into sending money to fraudulent accounts. To protect yourself, always verify the recipient’s legitimacy, avoid instant payment methods, and update your payment app regularly.

By exercising caution, you can enjoy the benefits of P2P payment apps safely. Stay vigilant and protect your hard-earned money in the digital age.

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