Zelle is a money transfer service that businesses can use to make and receive payments. Our guide tells you how to set up and use Zelle For Business.
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A Zelle business account offers businesses a promising potential alternative payment method. Namely, Zelle bypasses the need for both credit card payments and digital wallets such as PayPal. Instead, businesses can use Zelle For Business to request or receive funds directly from customers, as well as send or request payments from vendors and contractors.
At the same time, Zelle For Business offers only limited payment processing services. Access to the service and features depends on which bank you use, and Zelle is only available within the US.
Read on for an in-depth look at what Zelle For Business is, what services it offers, what it costs, and what you need to be able to use Zelle For Business.
Table of Contents
- What Is Zelle?
- Can I Use Zelle For Business?
- Which Banks Offer Zelle For Business Accounts?
- How To Set Up A Zelle Business Account
- How Much Does Zelle Cost?
- Don’t Like Zelle For Business? Try These Alternatives
- Beware Of Zelle Business Account Scams
- The Bottom Line On Zelle For Business
- Frequently Asked Questions About Zelle For Business
What Is Zelle?
Zelle is a real-time peer-to-peer (P2P) transfer service that transfers payments between consumers using hundreds of pre-vetted banks that are part of the Zelle processing network. You can access Zelle using your bank’s online banking app or the standalone Zelle app.
Zelle users can send or request money using the email address or phone number associated with their bank account. The other party gets a text or email from Zelle that lets them know about the payment or request. If the person has a bank account with one of Zelle’s participating banks or credit unions, they can quickly sign up for Zelle through their bank or credit union’s mobile app or website.
Can I Use Zelle For Business?
Zelle now supports business and personal transactions. You and your customer(s) will need access to Zelle, which shouldn’t be a problem since most major US banks already use the Zelle network. Before getting started, you should set up Zelle For Business using your business banking account, business credit card, and an email address and phone number that are different from your personal ones.
The main difference in using Zelle for business transactions vs. personal is that personal transactions are free; business transactions may have fees imposed by one or both banks involved in the transfer of funds. You’ll want to confirm your bank’s policies on using Zelle For Business, as not every bank in the Zelle network supports this use. Also, banks supporting Zelle for business transactions will usually have maximum transfer limits and possibly transaction fees.
Here are the main things to consider when using Zelle for business purposes:
Pros
- Nearly-instant funds transfers
- No transaction processing fees (some banks)
- Transactions are very secure and FDIC-insured
- Contactless payment method
- Available through most major US banks
Cons
- No buyer purchase protection
- Only available in the US
- Only supports transactions in US dollars
- Transaction fees may apply (with some banks)
- Usually subject to maximum transfer limits
In some ways, Zelle has similarities to third-party money transfer apps such as PayPal and Venmo. However, like ACH, it relies upon the customer’s bank account rather than a digital wallet. Zelle transfers are faster than ACH payments, which may be an incentive for some users that need their funds quickly. (We have a post on what an ACH payment is and how they work if you need a quick course on them.) However, speed shouldn’t be the only factor in deciding whether a Zelle business account is right for you.
7 Ways To Use Zelle For Business
Zelle For Business is quick and convenient for a variety of business use cases. While nearly any business can incorporate Zelle as part of its payments strategy, it works best for the following types of businesses:
- Freelancers or independent contractors
- Service industries (e.g., gardeners, house cleaners, etc.)
- Home contractors (e.g., electricians, plumbers, etc.)
- B2B payments to contractors or vendors
- Nonprofits
- Businesses that only occasionally accept non-cash payments
- Any business that needs to receive a disbursem*nt from another organization
In general, Zelle is a great option for small businesses that need to accept payments in the field but don’t want to bother with relying on a bulky wireless credit card terminal or other types of mobile processing systems. It’s also a great alternate payment method for any business that relies on invoices to get paid.
In addition to accepting payments from your customers, Zelle can be used to receive disbursem*nts from an organization, company, or government institution. Simply provide either the email address or US mobile phone number you used to set up your Zelle account to the entity that is going to pay you, and the funds can be deposited directly into your business banking account. Potential use cases include receiving insurance claim payouts, income tax refunds, B2B payments, and more.
However, business owners should know that Zelle doesn’t work for international transactions. It will also be very unwieldy for any high-volume business that processes a large number of transactions daily.
Zelle for Business is best suited to home businesses and very small field businesses that deal with occasional invoices. Because you’ll be working with phone numbers and emails to handle transactions, it’s the kind of payment method you want to use when you can see and interface with your customers to build trust.
Zelle is a promising service, but it’s not a great solution for established businesses needing to process a steady volume of payments. If you’re looking for an alternative to credit card processing, ACH payments are still the most viable option. Check out our list of the best ACH payment providers to get started with affordable, reliable bank transfers. Many of these providers also offer integrated credit card processing at competitive rates as well!
What About Zelle For Nonprofits?
Zelle can be a great option for nonprofit organizations that operate on a shoestring budget and are constantly looking for ways to cut costs. Because there are usually no fees to accept donations via Zelle, a nonprofit can save on processing costs and allocate more of the donated funds to its mission. Offering additional payment methods like Zelle can also increase the overall volume of donations your nonprofit receives.
At the same time, you’ll want to consider the lack of buyer protection for Zelle transactions. While people will rarely want to rescind or cancel a donation, they may wish to change the amount or have it come out of a different account. You’ll want to establish clear policies for dealing with these kinds of situations before you start accepting Zelle payments.
Which Banks Offer Zelle For Business Accounts?
Hundreds of banks across the US are part of the Zelle payment network, although it’s important to note that not all of them offer Zelle For Business accounts. Some of the banks that offer Zelle For Business are Bank of America, Capital One, and Wells Fargo. Other best-known banks that offer Zelle For Business are:
- Ally Bank
- BMO Harris Bank
- Chase
- Citi
- Discover Bank
- Fidelity Bank
- Morgan Stanley
- PNC Bank
- US Bank
- USAA
You can use Zelle For Business through either the proprietary Zelle mobile app or your bank’s mobile banking application. Several well-known banks and credit unions currently partner with Zelle but don’t yet integrate Zelle with their banking app (including Morgan Stanley and several others).
Zelle is operated by Early Warning Services, LLC, a consortium owned by several of the largest banks in the US, including Bank of America, Wells Fargo, Chase, and several others. However, a bank doesn’t have to have an ownership stake in the company to use Zelle.
Keep in mind that the above list of participating banks isn’t exhaustive; check with your bank to see whether it supports Zelle For Business and integrates Zelle transfers with its mobile banking application.
Do I Need A Business Bank Account To Use Zelle?
The good news is your customers don’t need a business account to make payments to you. There are some other limitations on accounts, however: business accounts cannot send or receive money from personal accounts that have enrolled in the Zelle app with only a debit card. For both you and your customers, enrolling in Zelle requires that you provide both a bank account number and a routing number.
You, on the other hand, will need a business bank account for your Zelle account. For additional information on business bank accounts, please consult our post on how to open a business banking account. If you don’t have your own business checking account yet, don’t worry. The process isn’t hard, but it helps to be prepared.
First, make sure you double-check and have all of the documents needed to open a business bank account.
After that, you can assess which bank might be the right fit for your small business by reading about our best options for business bank accounts.
How To Set Up A Zelle Business Account
Setting up a Zelle account for your business is easy. In fact, it’s pretty much a one-two-three process that you can complete in a matter of minutes.
Before you get started, double-check with your bank that you can use Zelle with its mobile banking app or online banking service, and confirm that you have a cell phone number or email address that you can associate with your new Zelle account. Note that you cannot use the same email or phone number for your Zelle business account that you already use for your personal Zelle account.
Now that you’re ready to upgrade to a Zelle business account, follow these three simple steps to get started:
- Access Zelle by enrolling an eligible US phone number or email address through your bank’s mobile banking app or directly through the Zelle mobile app.
- Once you’re signed up, enter your recipient’s email address or US mobile phone number through your mobile banking app’s integrated Zelle service or the Zelle app.
- Finally, choose the amount of money you want to send your recipient, whom Zelle notifies with instructions to claim their funds once you transfer the money.
How Much Does Zelle Cost?
Zelle currently charges no fees to receive or transmit funds for either individuals or business users. This policy applies to sending or receiving money with Zelle through both a participating bank’s mobile banking app as well as through that bank’s online banking service. However, Zelle recommends that users confirm with their bank or credit union that they don’t need to pay additional fees for using Zelle, as some participating banks might charge such fees.
Zelle Payments Transfer Limits
Zelle’s transfer limits vary depending on a user’s participating bank. Typically, though, there’s a limit on the amount and the number of payment transfers users can send per day, week, and month. For example, Bank of America’s current transfer limits for small businesses are as follows:
| Time Period | Dollar Amount | Total Transfers |
|---|---|---|
| 24 hours | $15,000 | 20 |
| 7 days | $45,000 | 60 |
| 30 days | $60,000 | 120 |
Referring to the above example, small business users can process a single $15,000 transfer or 20 $750 transfers in a 24-hour period. The same goes for the seven-day and 30-day limits.
Remember that since member banks control many details of Zelle, including transfer limits, it’s important that you verify what your bank’s specific limits are for daily, weekly, and monthly transfers.Lastly, note that a transfer limit typically applies to outbound transfers. Usually, banks don’t limit how much you can receive through Zelle.
Don’t Like Zelle For Business? Try These Alternatives
What if your business needs don’t match up with any of the common use cases we’ve outlined above? Luckily, you have other options.
Spurred on by the surge in eCommerce transactions during the COVID-19 pandemic, alternative payment methods have flourished recently. Today, your customers have more ways to pay you than ever before. Each method offers its own unique features (and shortcomings), but all of them have the potential to improve the cash flow of your business.
Venmo
Venmo is similar to Zelle in that it’s also an app-based peer-to-peer transfer service. However, it’s more developed for business use than Zelle.
Merchants can create Venmo For Business profiles, which helps to keep your personal and business transactions separate. Venmo isn’t free if you use it to accept a business transaction. You’ll have to pay 1.9% + $0.10 per transaction for purchases made using the Venmo app and a QR code or 3.49% + $0.49 per transaction for purchases made online or in-app using the Braintree gateway or PayPal Checkout. These fees give your customers buyer protection, which can be useful in the event of a mistaken or disputed sale.
You’ll still have to apply any applicable sales taxes manually, and there’s no support for recurring billing. Like Zelle, Venmo doesn’t directly support the use of payment links. However, you can send a QR code via text or email to facilitate payment. Although it’s not free, Venmo is a better choice for merchants who need to accept a lot of in-person transactions.
Cash App
Square’s Cash App For Business is also similar to what Venmo offers in that it allows you to use Cash App’s P2P transfer service for business transactions.
Business transactions aren’t free — you’ll pay 2.75% per transaction. There’s also a 1.25% fee (minimum $0.25) on instant deposits if you want your money right now.
As with all of these services, there are a number of limits on how much money you can send, both in a single transaction and within a certain amount of time. However, there are no limits on how much money you can receive.
One advantage Cash App has over other P2P competitors is that it integrates with the Square payments ecosystem, so you can accept credit card payments directly by using one of Square’s mobile card readers or terminals. However, you’ll still be responsible for calculating and applying sales tax, and you’ll mostly be on your own when it comes to reporting business income. Cash App only generates a Form 1099-K if you have over $20,000 in transactions in a calendar year (less in some states).
Cash App works best for businesses that already have a Square account to accept credit card payments, although its processing fees are on the high side compared to what you’ll pay elsewhere.
Apple Pay
Apple Pay is another great alternative payment method for merchants who want to maximize the number of ways they can accept payments from customers.
There are no additional fees to use it, enhanced payment security is built-in, and it’s quicker and more convenient to process a sale than traditional credit/debit card acceptance methods, such as magstripe and EMV. However, it won’t replace your existing merchant account (if you have one).
For starters, you’ll need an NFC-compatible terminal or mobile card reader to accept in-person transactions. Your customers will need an iPhone or Apple Watch with their payment card information stored in Apple Wallet. Online transactions are also supported and require that customers use their Apple devices to authenticate Apple Pay transactions with either Touch ID or Face ID.
Almost all merchant services providers today support Apple Pay and offer compatible terminals, so it’s a great addition to your arsenal of payment methods. Note that you’ll also want to include support for Google Pay and Samsung Pay for your Android-using customers.
Wave Payments
If you already use Wave for your business’s accounting needs, the optional Wave Payments service can be a great addition to your stable of supported payment methods.
Wave Payments is essentially a third-party payment processor, similar to Square or PayPal. Like other providers of this nature, Wave Payments uses a pay-as-you-go billing system with no long-term commitments and a flat-rate pricing plan for credit and debit card transactions. Visa and Mastercard credit/debit card transactions all cost 2.9% + $0.60 each to process (3.4% + $0.60 for American Express). Wave Payments also supports ACH transfers, which cost1.0% each ($1.00 minimum).
While its transaction processing rates are on the high side, the lack of a monthly fee (unless you’re also using Wave Payroll) makes it a very affordable option for many small businesses. The primary advantage of using Wave Payments is that your transaction information will automatically integrate with Wave’s accounting service. However, you could also accept payments using Zelle, Venmo, or Cash App and manually enter this information. The practicality of this solution will depend on how many transactions you accept every month that require manual entry.
Beware Of Zelle Business Account Scams
Unfortunately, Zelle has been in the news recently for some not-so-great reasons.
Specifically, its lack of buyer protection has quickly made it a popular tool for online scammers, con artists, and cyber thieves. If someone can reach you on the phone and convince you to send them money through Zelle for any reason, you have no recourse whatsoever once you discover that you’ve been scammed. Your bank will not refund your money — period.
While this issue doesn’t directly affect your ability to receive legitimate payments from your customers, be aware that many of them will be understandably reluctant to pay you with Zelle. This is especially true if they don’t already use the service and have only heard about it through stories about Zelle scams in the news.
Zelle recommends only sending payments to people you know and trust, so it’s best to have a secure, comfortable relationship with your customers before asking them to pay you with Zelle. It’s also a good idea to offer a variety of other payment methods instead of relying solely on Zelle to get paid.
The Bottom Line On Zelle For Business
Zelle can be very useful for both businesses and customers needing to navigate a new world of remote purchasing, selling, and banking. Because Zelle is readily accessible through a huge number of major participating banks and is free to use, it’s no wonder the app has made waves even amongst equally large and well-known competitors. However, with the COVID-era policies and programs winding down and inflation surging, it’s uncertain how long Zelle will remain free to use.
Zelle makes a lot of sense for businesses and users in the US that want lightning-fast payment transfers between US bank accounts. It’s also a great choice for small business owners who wish for an equally fast signup process that doesn’t require creating a new account number to start sending payments.
At the same time, the current proliferation of Zelle scams and the lack of any purchase protection guarantees could (understandably) make your customers uncomfortable with using it.
While the fact that Zelle is free to use is its strongest selling point, we anticipate that, eventually, it will have to start charging for its services — both to ensure a profit and to offer some buyer protection. Zelle may adopt a pricing structure similar to Venmo, where consumer-to-consumer transactions are free, but business-to-consumer (B2C) and B2B transactions require a processing fee.
For now, however, it’s a great option for any business looking to avoid the high cost of credit card processing and offer customers an easy, quick way to make a payment.
Frequently Asked Questions About Zelle For Business
Can a small business accept Zelle?
Yes, small businesses can accept Zelle payments from customers if their bank offers Zelle through its mobile banking application or online banking service.
Can I pay contractors with Zelle?
Yes, small business owners can send one-time and recurring payments to contractors who have signed up to use Zelle. Invoicing functionality, however, will require a separate service.
Is Zelle free for businesses?
Zelle currently does not charge any fees for users needing to receive or send funds. Zelle recommends that users confirm with their participating bank or credit union that no additional fees must be paid to use Zelle.
Can I pay vendors with Zelle?
Businesses can pay vendors with Zelle so long as both parties have signed up to use Zelle with an eligible US mobile phone number or email account.
Is it safe to send money through Zelle?
Yes. Zelle ensures that users can securely send and receive funds by directly transferring money from one bank account to another.
How long does it take to get money from Zelle?
Most money transfers with Zelle are completed in a matter of minutes so long as both the receiver and sender of the funds have signed up to start using Zelle.
Can you use a business debit card with Zelle?
No, you cannot enroll in Zelle with a debit card or receive payments from consumers who signed up for Zelle with a debit card.
Can I send an invoice via Zelle?
As of yet, there is no built-in Zelle invoice feature. However, you can send an invoice using a third-party service and include information for the customer to pay the invoice using Zelle.
Can my employer pay me through Zelle?
While paying employees through Zelle is technically possible, we strongly recommend against this practice. Zelle is not intended to function as a payroll service and does not report transactions to the IRS, including payments over $600. Employers are, however, still responsible for reporting this information to the IRS on their own and could be charged with tax evasion for failure to do so.
Does Zelle charge a fee for business?
No, Zelle charges no processing fees for transactions between businesses, consumers, or other businesses. (Note that some banks in the Zelle network may charge fees for business use. However, this is not common.)
As a seasoned expert in financial technology and payment services, I can confidently provide an in-depth analysis of the concepts discussed in the article about Zelle for Business.
Zelle Overview: Zelle is a real-time peer-to-peer (P2P) transfer service that facilitates payments between consumers using a network of pre-vetted banks. It operates through both bank-specific online platforms and a standalone Zelle app.
Zelle for Business: Zelle has extended its services to support business transactions, allowing businesses to make and receive payments without relying on credit cards or digital wallets like PayPal. However, the availability of features depends on the bank, and Zelle is exclusively accessible within the United States.
Setting up a Zelle Business Account: Businesses can set up a Zelle For Business account by linking it to their business banking account, business credit card, and providing a distinct email address and phone number. This separation from personal accounts is crucial for proper business transactions.
Cost of Using Zelle: Currently, Zelle does not charge fees for sending or receiving funds, making it an attractive option for businesses. However, it's emphasized that users should confirm with their banks, as some may impose additional fees.
Pros and Cons of Zelle for Business: The article outlines several pros and cons of using Zelle for business transactions. Pros include nearly-instant fund transfers, security, and FDIC insurance. On the downside, Zelle lacks buyer purchase protection, is limited to the U.S., supports only U.S. dollar transactions, and may have transaction fees with certain banks.
Ways to Use Zelle for Business: Zelle For Business is recommended for freelancers, service industries, home contractors, B2B payments, nonprofits, and businesses dealing with occasional invoices. It's particularly suitable for small businesses and those that need quick, contactless payment methods.
Alternatives to Zelle for Business: The article suggests alternative payment methods for businesses, including Venmo, Cash App, Apple Pay, and Wave Payments. Each has its own features, transaction fees, and limitations, providing businesses with options based on their specific needs.
Zelle for Nonprofits: Zelle is presented as a cost-effective option for nonprofits to receive donations, but the lack of buyer protection is highlighted. Clear policies for handling changes or cancellations in donations are recommended.
Participating Banks Offering Zelle For Business: The article lists several banks that support Zelle for business accounts, emphasizing that not all participating banks offer this service. It advises checking with individual banks to confirm support.
Requirements for Using Zelle: Customers do not need a business account to make payments, but there are limitations on accounts, such as restrictions on transactions between business and personal accounts enrolled with a debit card. Business owners need a business bank account for Zelle.
Setting Up a Zelle Business Account: Setting up a Zelle business account involves enrolling an eligible U.S. phone number or email address through the bank's mobile banking app or the standalone Zelle app. The recipient's information is then entered to send funds.
Cost and Transfer Limits of Zelle: Zelle currently charges no fees, but transfer limits vary by participating banks. The article provides an example of Bank of America's transfer limits for small businesses.
Zelle Business Account Scams: The article warns about the prevalence of scams involving Zelle due to its lack of buyer protection. Users are urged to be cautious and only use Zelle for transactions with trusted individuals.
Conclusion on Zelle for Business: Zelle is deemed useful for businesses in the U.S. requiring fast payment transfers. Its accessibility and free usage make it a favorable choice, especially for small businesses. However, concerns about potential future charges and the current proliferation of scams are noted.
Frequently Asked Questions: The article addresses common questions about Zelle for business, covering topics such as accepting Zelle as a small business, paying contractors and vendors, safety of transactions, duration of money transfers, using business debit cards, sending invoices, and the possibility of employers paying through Zelle. Clear answers and recommendations are provided for each question.
