8 ms·

Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

173 points by rdhyee 8y ago

throw7 8y ago
I've had problems with all of these online cash transfer "apps", so much so that I don't trust any of them. Venmo flagged my account and required me to "call them up" to "fix" things (yeah no). I've used google pay the most, but I've sent money with google pay that never reached the destination bank (the destination bank said it was "google's fault", whatever we canceled the transactions). I've sent money to an associate's email address with google pay and then a few days later she told me someone had withdrawn $999 dollars from her account associated with google pay. Her bank did get her money back after some days. yikes. Banks should not be "moving fast" to "catch up". They should be providing a trustable experience. I have zelle available with my bank, but no way am I experimenting until it's been stressed out.
- herpderperator 8y ago
  If your bank flags and blocks your credit card for suspicious activity which you didn't initiate, are you going to "yeah no" them too, and refuse to call them up? There is nothing wrong with having to call up a financial institution to verify things that raise alarm bells for them.
  - dothis9 8y ago
    I usually just pull out a different credit card, and then take the card that didn't work out of my wallet when I get home. Sometimes I might get around to calling my bank (somewhat depends on my perception of how long their customer service is going to take to fix the issue), but it's faster for me to just replace that card with another card from my collection of cards (I've got too many cards to keep them all in my wallet at any given time). The last card which was incorrectly flagged for suspicious activity probably cost that bank several thousand dollars in foregone interchange fees.
    - kristianc 8y ago
      > Sometimes I might get around to calling my bank (somewhat depends on my perception of how long their customer service is going to take to fix the issue), but it's faster for me to just replace that card with another card from my collection of cards (I've got too many cards to keep them all in my wallet at any given time). This is a real and common problem for banks/card issuers, who tend to be obsessive about keeping genuine transactions declined to a minimum for this reason. Blocking all fraud is achievable, but it would come at the cost of many instances like this.
  - throw7 8y ago
    For credit cards/banks, yes, but I can live without venmo. I initiated the transfer, but they then blocked my account, so I closed the account.
just_one_time_ 8y ago
While Bitcoin is making the whole industry redundant.
exhilaration 8y ago
Previously on HN: https://news.ycombinator.com/item?id=16395698 https://news.ycombinator.com/item?id=16395698
paulie_a 8y ago
Zelle is a piece of dogshit. Venmo is PayPal based so it is dogshit wrapped in catshit.
patio11 8y ago
If you ever send money to A and it actually goes to B, and for some reason the bank doesn't fix that the first time you get in touch with them, I recommend getting off the phone and escalating to an on-dead-tree letter: Dear BigBank Legal Department: This is written notice under Regulation E that BigBank has processed the following electronic transaction in error: (Brief recitation of transaction details.) You are required to investigate this matter within 10 business days of your receipt of this letter and provide me written confirmation of the results of your investigation. My desired resolution is a deposit of $XXX into my checking account with last four digits 1234. Regards, $YOU You really want BigBank to put into writing "We think we've satisfied our obligation to you because you told us to send it to your mother and instead we sent it to somebody in Cincinatti; that was totes reasonable." Or, rather, you want a lawyer at BigBank to say "Eff no I am not putting that in writing; pay him $300 and charge it off to operational losses, that's what that budget is for."
- arkades 8y ago
  Please elaborate, what is regulation E?
  - patio11 8y ago
    You've asked a question which is approximately "What is a garbage collector?" in terms of depth. Here's the short answer: it's a regulation about electronic funds transfers that US financial institutions, including every bank which offers Zelle, are obligated to uphold. There is a longer version of this answer; your life will probably not be materially improved by knowing it, but you can Google and read at your leisure.
    - saulrh 8y ago
      To be sure, is this [1] the part of the regulation that's being invoked by that letter? 1: https://en.wikipedia.org/wiki/Electronic_Fund_Transfer_Act#EFT_Errors https://en.wikipedia.org/wiki/Electronic_Fund_Transfer_Act#E...
  - bradleyjg 8y ago
valuearb 8y ago
Early Warning is owned by a consortium of major banks. Supposedly during development of the apps, if any one bank wanted a feature the team basically had to implement it. Allegedly the team wasn’t allowed to push out the ship date or refuse new features, their only lever was adding more resource. Any wonder why it shipped months late and with the most horrific reviews I’ve ever seen for a mobile app? My guess is fixing problems going forward won’t be an easier.
- toomuchtodo 8y ago
  Fixing problems might not be easy, but as you mention, Early Warning is owned by a consortium of large US banks. Compared to PayPal, Stripe, and other non bank chartered institutions, their resources are effectively unlimited. Those problems are going to get fixed eventually. Wells Fargo was fined a billion dollars [1] and will continue to operate as an ongoing business. This is a road bump. [1] https://www.npr.org/sections/thetwo-way/2018/04/20/604279604/wells-fargo-hit-with-1-billion-in-fines-over-consumer-abuses https://www.npr.org/sections/thetwo-way/2018/04/20/604279604...
  - RSZC 8y ago
    Throwing infinite money and developers at something does not make a good product. Source: I work for a SaaS aimed primarily at large banks, most of which attempted to build our product themselves before giving up and signing with us.
    - metei 8y ago
      Just curious, what does your SaaS do? Additionally, I've come to believe that even the most forward thinking banks and credit unions don't understand tech one bit, based on how poorly written most of their software is.
    - toomuchtodo 8y ago
      > Throwing infinite money and developers at something does not make a good product. Of course not. But it gives them more time to try and more attempts, where your runway is limited. You would eventually run out of funds if you don't find product market fit. They will not run out of funds, ever.
tedunangst 8y ago
Is any of this actually new or unique? If you mail an old school check to the wrong address and never get your concert tickets, do you get your money back?
- mikeash 8y ago
  Probably. Most likely you’d never lose the money in the first place, since the incorrect recipient would be unable to cash the check. If they did fraudulently cash it then you could get that reversed.
elvirs 8y ago
I noticed that one of the issues with Zelle is that people have accounts at multiple banks that all support Zelle but they use only 1 phone number connected to their banking apps. So sometimes when I send money from my chase mobile banking app to my friend's number who also has chase mobile banking app, the money actually ends up going to his bank of america account because he uses the same phone number on bank of america mobile banking app as well. Sometimes this becomes a serious issue and I think there is no centralized way to change your 'Zelle' settings.
- joelrunyon 8y ago
  Them tying this to a (cell) phone number is actually VERY annoying. I have multiple bank accounts, but one cell phone. The fact they limit the ability to create more accounts without more than one phone creates all sorts of issues.
  - dawhizkid 8y ago
    You can tie to an email. I sent money between 2 accounts I own where one is tied to my phone and the other an email. Not sure if this is technically “allowed” but it is way faster than using the actual external bank transfer options.
- lotsofpulp 8y ago
  In my experience, Zelle doesn't let you concurrently link a single phone number to multiple accounts.
doesnt_know 8y ago
Here in kiwi-land, a bank transfer from one individual or business to another is considered the most basic of banking services and all banks support it. Here are some screenshots from the KiwiBank web interface, (but it's similar for all banks): https://i.imgur.com/ug9VU5t.png https://i.imgur.com/ug9VU5t.png https://i.imgur.com/HRsyQoN.png https://i.imgur.com/HRsyQoN.png There are no fees related to this unless you start doing international transfers, it's just part of the service.
- btbuilder 8y ago
  I think this has to do with a fundamental difference in how sensitive account number and routing numbers are in the US compared with other international financial systems I have used. In the US, if someone has your account number and routing number you can attempt all sorts of fraud via the eCheck system. People and companies are wary about giving out their account numbers. Providing an account number here is more often used to withdraw money than deposit. These payment services offer an extra level of authentication and authorization that does not appear to be easily accessible in the traditional banking sector. Meanwhile, in my experience, in the UK sharing your account number is primarily used for other people doing a personal transfer to you. The institutions that can withdraw money directly from your bank account are limited to those in the Direct Debit system that has some vetting procedures and guarantees similar to what you would get in a credit card agreement[1]. This significantly reduces the chance of fraud, even with incidents like when Jeremy Clarkson printed his acct # in a newspaper on purpose [2]. [1] https://www.directdebit.co.uk/DirectDebitExplained/pages/directdebitguarantee.aspx https://www.directdebit.co.uk/DirectDebitExplained/pages/dir... [2] https://www.theguardian.com/money/2008/jan/07/personalfinancenews.scamsandfraud https://www.theguardian.com/money/2008/jan/07/personalfinanc...
  - djsumdog 8y ago
    The account number is literally on the bottom of your checks. It's not a secret and shouldn't be treated as one. Also in Australia/NZ, transfers are two directional as well. But just like the US, transfers happen in batches and through authorized banks (well until very recently when AU implemented instant transfer). As long as it's within the same country, you can track down fraud and close down those accounts. ACH is the US is restricted in a very similar way. It's very difficult for a non-bank to submit ACH files unless via a bank. The US could easily have a system just like AU/NZ/much of Europe (and in many EU country, they just add a TAN number, a one time non-reusable token to transfer funds). I wrote a post about this a while back: https://penguindreams.org/blog/the-american-banking-system-is-still-in-the-1990s/ https://penguindreams.org/blog/the-american-banking-system-i...
21 8y ago
> The catch is that the bank, like all the others that use Zelle, only considers transactions fraudulent if the customer did not authorize them. How can the banks be so short-sighted? Soon a lot of people will hear that Zelle is not secure and they will avoid using it.
- metei 8y ago
  Lots of banks and Credit Unions have implemented Zelle in app, its the last gasp they have to compete against Venmo. The only upside to Zelle is essentially offering instant transfers for free, where Venmo makes you wait a few days or pay $0.25.
  - morogop 8y ago
    The upside is that it's instantly in the target bank account, not a week away as it is with Venmo. I use Venmo to pay bar tabs and event tickets. I use Zelle to send my wife money for the mortgage.
  - dawhizkid 8y ago
    That’s a pretty huge upside IMO... It’s actually even faster than instant deposit on Venmo because the funds appear to settle instantly (not just transferred instantly)
    - metei 8y ago
      It is, I rather like it. There is a 1 business day delay for your first transaction fyi, which is a reasonable fraud deterrent. All transactions thereafter between Zelle members are instant and free though!
    - magduf 8y ago
      It is pretty huge, and as long as you're using it with people you actually trust, it should be safe.
- gwbas1c 8y ago
  Because the banks are trying to do something to replace cash. No one will ever find me if I pay for a fraudulent transaction with cash! They could probably use some kind of reputation system to warn that a transaction may be fraudulent... But let's get real for a minute. You need to take some responsibility when you're making a purchase to make sure that the other party is going to come through. When it comes to concert tickets, doesn't Ticketmaster already offer services to allow people to transact in tickets? Edit: One thing the banks could do, is differentiate between a person-to-person transfer, and a merchant requesting payment. There could be some kind of fraud restitution system when the payment is sent via a Merchant's request for payment. If someone asks you to send money without the normal merchant system then you know that it could be a scam. The banks could always warn that the person to person payment system is like putting cash in an envelope and cannot be refunded if there is fraud.
a3n 8y ago
It's frustrating to me that I can't just go to my Wells Fargo account on the web and send money from my account to my recipient's account by routing and account number. I can do that with my USAA bank account.
- deleted 8y ago
  [deleted]
- johnmcd3 8y ago
  US Bank took away next day transfers to a bank account via routing/account number (ACH) as they are pushing Zelle more. They also dropped the (previously higher) transaction limits on 3-day routing/acct numb/ACH down to the $5,000 3-day limit on Zelle. It’s frustrating when they take away a perfectly good service just push their new thing harder.
AlphaWeaver 8y ago
The Zelle app has had very poor Android support for quite a while... When I first tried to get the app to receive money it didn't even allow the account registration OR login flow to complete without the app crashing.
- Rebelgecko 8y ago
  It's still iffy. I have to reenter my phone number every time I open the app
whb07 8y ago
One of the examples used in the article, isn’t an argument against Zelle. Some chick sending a cash transfer for the full amount of some concert tickets got burned by some dude on craigslist. Didn’t know Venmo came with schmuck insurance.
_bxg1 8y ago
A conglomerate of giant, old, non-tech companies tried to launch a casual and trendy service, and the software sucks? I'm shocked. That said: "...a phishing email that appeared to be from Wells Fargo tricked her into entering her bank ID and password into a fraudulent website." This situation didn't depend on Zelle's existence to be possible. I would say the problem here is browsers not doing a good enough job helping people identify when a site isn't the one they think it is, but it's a tough problem.
panarky 8y ago
There needs to be a very large, very prominent warning on every transaction: "ONLY SEND MONEY TO PEOPLE YOU KNOW." "IF YOU SEND MONEY TO A SCAMMER, ZELLE WILL NOT HELP YOU GET YOUR MONEY BACK." Zelle is not PayPal. There is no dispute resolution service if the seller on Craigslist doesn't deliver and stops responding to your messages. Don't use Zelle to send money to strangers.
- eckmLJE 8y ago
  Venmo is the same way. A friend of mine accepted payment for a piece of hardware through Venmo. My friend handed over the hardware in person to the buyer once the payment was "in" my friend's wallet and he had initiated the cash out, but before the money had actually cleared into his bank account. Once he and the buyer parted ways, the payment was canceled due to a claim of fraud by the card's owner, and my friend's Venmo account was suspended because had used it for commercial purposes and not just sending money between friends. Apparently, even if you already have the money cleared in your bank account, Venmo has the ability to charge it back once a fraud claim is initiated. Apparently this is very common on the platform.
  - panarky 8y ago
    > Venmo is the same way. If Venmo reverses payment due to claims of fraud, then this is pretty much the exact opposite of Zelle. That makes Venmo more like PayPal, with a dispute resolution process. Zelle doesn't care if your counterparty is a scammer. If you initiated the payment, the money is gone.
    - ianburrell 8y ago
      There are two different kinds of fraud. One is where there is fraudulent payment like from account being taken over. Venmo and Zelle can reverse those transactions. The other kind is where purchase is fraudulent. Venmo and Zelle don't offer any protection for purchases or sales. It is only credit cards and equivalent that offer purchase protection.
      - 8y ago
dawhizkid 8y ago
Pro tip for using Zelle more safely: Ask the receiver to request funds from you vs sending to X or Y number/email.
sjroot 8y ago
The one thing I don't understand about Venmo is that it, based on my (limited) use, seems to show transactions amongst users in a "social networking" manner. I believe you are able to make your activity private, but why would anyone want it any other way? Am I the only one who thinks this is absolutely absurd? I am a very happy user of Square Cash as a result.
- rhodysurf 8y ago
  Sort of. It shows who paid who and their comment, but it does NOT show how much money was exchanged.
  - Djvacto 8y ago
    Yep. I made mine private by default, but it is basically just a way to send a friend money, that if you leave it public to other friends, is just a way to share jokes. Paying a roommate for utilities but setting the description to the tongue-out emoji and an eggplant, or something similarly silly.
briandear 8y ago
Of course not everyone has an Apple device, but person-to-person Apple Pay is really slick and, based on my amateur analysis, very secure.
meesterdude 8y ago
haha I actually tried using Zelle a few days ago - "oh look, the banks are joining the future! lets try this". WRONG. Super convoluted and couldn't get it to work in the end, even after calling customer service. Paypal was 30 seconds. Zelle is Helle
jrs95 8y ago
Venmo itself has had a long history of the same issues. The main problem here for Zelle is that they should have seen this coming and handled it a bit better.

173 points by rdhyee 8y ago

I've had problems with all of these online cash transfer "apps", so much so that I don't trust any of them. Venmo flagged my account and required me to "call them up" to "fix" things (yeah no). I've used google pay the most, but I've sent money with google pay that never reached the destination bank (the destination bank said it was "google's fault", whatever we canceled the transactions). I've sent money to an associate's email address with google pay and then a few days later she told me someone had withdrawn $999 dollars from her account associated with google pay. Her bank did get her money back after some days. yikes. Banks should not be "moving fast" to "catch up". They should be providing a trustable experience. I have zelle available with my bank, but no way am I experimenting until it's been stressed out.

herpderperator 8y ago
If your bank flags and blocks your credit card for suspicious activity which you didn't initiate, are you going to "yeah no" them too, and refuse to call them up? There is nothing wrong with having to call up a financial institution to verify things that raise alarm bells for them.
- dothis9 8y ago
  I usually just pull out a different credit card, and then take the card that didn't work out of my wallet when I get home. Sometimes I might get around to calling my bank (somewhat depends on my perception of how long their customer service is going to take to fix the issue), but it's faster for me to just replace that card with another card from my collection of cards (I've got too many cards to keep them all in my wallet at any given time). The last card which was incorrectly flagged for suspicious activity probably cost that bank several thousand dollars in foregone interchange fees.
  - kristianc 8y ago
    > Sometimes I might get around to calling my bank (somewhat depends on my perception of how long their customer service is going to take to fix the issue), but it's faster for me to just replace that card with another card from my collection of cards (I've got too many cards to keep them all in my wallet at any given time). This is a real and common problem for banks/card issuers, who tend to be obsessive about keeping genuine transactions declined to a minimum for this reason. Blocking all fraud is achievable, but it would come at the cost of many instances like this.
- throw7 8y ago
  For credit cards/banks, yes, but I can live without venmo. I initiated the transfer, but they then blocked my account, so I closed the account.

just_one_time_ 8y ago

While Bitcoin is making the whole industry redundant.

exhilaration 8y ago

Previously on HN: https://news.ycombinator.com/item?id=16395698 https://news.ycombinator.com/item?id=16395698

paulie_a 8y ago

Zelle is a piece of dogshit. Venmo is PayPal based so it is dogshit wrapped in catshit.

patio11 8y ago

If you ever send money to A and it actually goes to B, and for some reason the bank doesn't fix that the first time you get in touch with them, I recommend getting off the phone and escalating to an on-dead-tree letter: Dear BigBank Legal Department: This is written notice under Regulation E that BigBank has processed the following electronic transaction in error: (Brief recitation of transaction details.) You are required to investigate this matter within 10 business days of your receipt of this letter and provide me written confirmation of the results of your investigation. My desired resolution is a deposit of $XXX into my checking account with last four digits 1234. Regards, $YOU You really want BigBank to put into writing "We think we've satisfied our obligation to you because you told us to send it to your mother and instead we sent it to somebody in Cincinatti; that was totes reasonable." Or, rather, you want a lawyer at BigBank to say "Eff no I am not putting that in writing; pay him $300 and charge it off to operational losses, that's what that budget is for."

arkades 8y ago
Please elaborate, what is regulation E?
- patio11 8y ago
  You've asked a question which is approximately "What is a garbage collector?" in terms of depth. Here's the short answer: it's a regulation about electronic funds transfers that US financial institutions, including every bank which offers Zelle, are obligated to uphold. There is a longer version of this answer; your life will probably not be materially improved by knowing it, but you can Google and read at your leisure.
  - saulrh 8y ago
    To be sure, is this [1] the part of the regulation that's being invoked by that letter? 1: https://en.wikipedia.org/wiki/Electronic_Fund_Transfer_Act#EFT_Errors https://en.wikipedia.org/wiki/Electronic_Fund_Transfer_Act#E...
- bradleyjg 8y ago

valuearb 8y ago

Early Warning is owned by a consortium of major banks. Supposedly during development of the apps, if any one bank wanted a feature the team basically had to implement it. Allegedly the team wasn’t allowed to push out the ship date or refuse new features, their only lever was adding more resource. Any wonder why it shipped months late and with the most horrific reviews I’ve ever seen for a mobile app? My guess is fixing problems going forward won’t be an easier.

toomuchtodo 8y ago
Fixing problems might not be easy, but as you mention, Early Warning is owned by a consortium of large US banks. Compared to PayPal, Stripe, and other non bank chartered institutions, their resources are effectively unlimited. Those problems are going to get fixed eventually. Wells Fargo was fined a billion dollars [1] and will continue to operate as an ongoing business. This is a road bump. [1] https://www.npr.org/sections/thetwo-way/2018/04/20/604279604/wells-fargo-hit-with-1-billion-in-fines-over-consumer-abuses https://www.npr.org/sections/thetwo-way/2018/04/20/604279604...
- RSZC 8y ago
  Throwing infinite money and developers at something does not make a good product. Source: I work for a SaaS aimed primarily at large banks, most of which attempted to build our product themselves before giving up and signing with us.
  - metei 8y ago
    Just curious, what does your SaaS do? Additionally, I've come to believe that even the most forward thinking banks and credit unions don't understand tech one bit, based on how poorly written most of their software is.
  - toomuchtodo 8y ago
    > Throwing infinite money and developers at something does not make a good product. Of course not. But it gives them more time to try and more attempts, where your runway is limited. You would eventually run out of funds if you don't find product market fit. They will not run out of funds, ever.

tedunangst 8y ago

Is any of this actually new or unique? If you mail an old school check to the wrong address and never get your concert tickets, do you get your money back?

mikeash 8y ago
Probably. Most likely you’d never lose the money in the first place, since the incorrect recipient would be unable to cash the check. If they did fraudulently cash it then you could get that reversed.

elvirs 8y ago

I noticed that one of the issues with Zelle is that people have accounts at multiple banks that all support Zelle but they use only 1 phone number connected to their banking apps. So sometimes when I send money from my chase mobile banking app to my friend's number who also has chase mobile banking app, the money actually ends up going to his bank of america account because he uses the same phone number on bank of america mobile banking app as well. Sometimes this becomes a serious issue and I think there is no centralized way to change your 'Zelle' settings.

joelrunyon 8y ago
Them tying this to a (cell) phone number is actually VERY annoying. I have multiple bank accounts, but one cell phone. The fact they limit the ability to create more accounts without more than one phone creates all sorts of issues.
- dawhizkid 8y ago
  You can tie to an email. I sent money between 2 accounts I own where one is tied to my phone and the other an email. Not sure if this is technically “allowed” but it is way faster than using the actual external bank transfer options.
lotsofpulp 8y ago
In my experience, Zelle doesn't let you concurrently link a single phone number to multiple accounts.

doesnt_know 8y ago

Here in kiwi-land, a bank transfer from one individual or business to another is considered the most basic of banking services and all banks support it. Here are some screenshots from the KiwiBank web interface, (but it's similar for all banks): https://i.imgur.com/ug9VU5t.png https://i.imgur.com/ug9VU5t.png https://i.imgur.com/HRsyQoN.png https://i.imgur.com/HRsyQoN.png There are no fees related to this unless you start doing international transfers, it's just part of the service.

btbuilder 8y ago
I think this has to do with a fundamental difference in how sensitive account number and routing numbers are in the US compared with other international financial systems I have used. In the US, if someone has your account number and routing number you can attempt all sorts of fraud via the eCheck system. People and companies are wary about giving out their account numbers. Providing an account number here is more often used to withdraw money than deposit. These payment services offer an extra level of authentication and authorization that does not appear to be easily accessible in the traditional banking sector. Meanwhile, in my experience, in the UK sharing your account number is primarily used for other people doing a personal transfer to you. The institutions that can withdraw money directly from your bank account are limited to those in the Direct Debit system that has some vetting procedures and guarantees similar to what you would get in a credit card agreement[1]. This significantly reduces the chance of fraud, even with incidents like when Jeremy Clarkson printed his acct # in a newspaper on purpose [2]. [1] https://www.directdebit.co.uk/DirectDebitExplained/pages/directdebitguarantee.aspx https://www.directdebit.co.uk/DirectDebitExplained/pages/dir... [2] https://www.theguardian.com/money/2008/jan/07/personalfinancenews.scamsandfraud https://www.theguardian.com/money/2008/jan/07/personalfinanc...
- djsumdog 8y ago
  The account number is literally on the bottom of your checks. It's not a secret and shouldn't be treated as one. Also in Australia/NZ, transfers are two directional as well. But just like the US, transfers happen in batches and through authorized banks (well until very recently when AU implemented instant transfer). As long as it's within the same country, you can track down fraud and close down those accounts. ACH is the US is restricted in a very similar way. It's very difficult for a non-bank to submit ACH files unless via a bank. The US could easily have a system just like AU/NZ/much of Europe (and in many EU country, they just add a TAN number, a one time non-reusable token to transfer funds). I wrote a post about this a while back: https://penguindreams.org/blog/the-american-banking-system-is-still-in-the-1990s/ https://penguindreams.org/blog/the-american-banking-system-i...

21 8y ago

> The catch is that the bank, like all the others that use Zelle, only considers transactions fraudulent if the customer did not authorize them. How can the banks be so short-sighted? Soon a lot of people will hear that Zelle is not secure and they will avoid using it.

metei 8y ago
Lots of banks and Credit Unions have implemented Zelle in app, its the last gasp they have to compete against Venmo. The only upside to Zelle is essentially offering instant transfers for free, where Venmo makes you wait a few days or pay $0.25.
- morogop 8y ago
  The upside is that it's instantly in the target bank account, not a week away as it is with Venmo. I use Venmo to pay bar tabs and event tickets. I use Zelle to send my wife money for the mortgage.
- dawhizkid 8y ago
  That’s a pretty huge upside IMO... It’s actually even faster than instant deposit on Venmo because the funds appear to settle instantly (not just transferred instantly)
  - metei 8y ago
    It is, I rather like it. There is a 1 business day delay for your first transaction fyi, which is a reasonable fraud deterrent. All transactions thereafter between Zelle members are instant and free though!
  - magduf 8y ago
    It is pretty huge, and as long as you're using it with people you actually trust, it should be safe.
gwbas1c 8y ago
Because the banks are trying to do something to replace cash. No one will ever find me if I pay for a fraudulent transaction with cash! They could probably use some kind of reputation system to warn that a transaction may be fraudulent... But let's get real for a minute. You need to take some responsibility when you're making a purchase to make sure that the other party is going to come through. When it comes to concert tickets, doesn't Ticketmaster already offer services to allow people to transact in tickets? Edit: One thing the banks could do, is differentiate between a person-to-person transfer, and a merchant requesting payment. There could be some kind of fraud restitution system when the payment is sent via a Merchant's request for payment. If someone asks you to send money without the normal merchant system then you know that it could be a scam. The banks could always warn that the person to person payment system is like putting cash in an envelope and cannot be refunded if there is fraud.

a3n 8y ago

It's frustrating to me that I can't just go to my Wells Fargo account on the web and send money from my account to my recipient's account by routing and account number. I can do that with my USAA bank account.

deleted 8y ago
[deleted]
johnmcd3 8y ago
US Bank took away next day transfers to a bank account via routing/account number (ACH) as they are pushing Zelle more. They also dropped the (previously higher) transaction limits on 3-day routing/acct numb/ACH down to the $5,000 3-day limit on Zelle. It’s frustrating when they take away a perfectly good service just push their new thing harder.

AlphaWeaver 8y ago

The Zelle app has had very poor Android support for quite a while... When I first tried to get the app to receive money it didn't even allow the account registration OR login flow to complete without the app crashing.

Rebelgecko 8y ago
It's still iffy. I have to reenter my phone number every time I open the app

whb07 8y ago

One of the examples used in the article, isn’t an argument against Zelle. Some chick sending a cash transfer for the full amount of some concert tickets got burned by some dude on craigslist. Didn’t know Venmo came with schmuck insurance.

_bxg1 8y ago

A conglomerate of giant, old, non-tech companies tried to launch a casual and trendy service, and the software sucks? I'm shocked. That said: "...a phishing email that appeared to be from Wells Fargo tricked her into entering her bank ID and password into a fraudulent website." This situation didn't depend on Zelle's existence to be possible. I would say the problem here is browsers not doing a good enough job helping people identify when a site isn't the one they think it is, but it's a tough problem.

panarky 8y ago

There needs to be a very large, very prominent warning on every transaction: "ONLY SEND MONEY TO PEOPLE YOU KNOW." "IF YOU SEND MONEY TO A SCAMMER, ZELLE WILL NOT HELP YOU GET YOUR MONEY BACK." Zelle is not PayPal. There is no dispute resolution service if the seller on Craigslist doesn't deliver and stops responding to your messages. Don't use Zelle to send money to strangers.

eckmLJE 8y ago
Venmo is the same way. A friend of mine accepted payment for a piece of hardware through Venmo. My friend handed over the hardware in person to the buyer once the payment was "in" my friend's wallet and he had initiated the cash out, but before the money had actually cleared into his bank account. Once he and the buyer parted ways, the payment was canceled due to a claim of fraud by the card's owner, and my friend's Venmo account was suspended because had used it for commercial purposes and not just sending money between friends. Apparently, even if you already have the money cleared in your bank account, Venmo has the ability to charge it back once a fraud claim is initiated. Apparently this is very common on the platform.
- panarky 8y ago
  > Venmo is the same way. If Venmo reverses payment due to claims of fraud, then this is pretty much the exact opposite of Zelle. That makes Venmo more like PayPal, with a dispute resolution process. Zelle doesn't care if your counterparty is a scammer. If you initiated the payment, the money is gone.
  - ianburrell 8y ago
    There are two different kinds of fraud. One is where there is fraudulent payment like from account being taken over. Venmo and Zelle can reverse those transactions. The other kind is where purchase is fraudulent. Venmo and Zelle don't offer any protection for purchases or sales. It is only credit cards and equivalent that offer purchase protection.
    - 8y ago

dawhizkid 8y ago

Pro tip for using Zelle more safely: Ask the receiver to request funds from you vs sending to X or Y number/email.

sjroot 8y ago

The one thing I don't understand about Venmo is that it, based on my (limited) use, seems to show transactions amongst users in a "social networking" manner. I believe you are able to make your activity private, but why would anyone want it any other way? Am I the only one who thinks this is absolutely absurd? I am a very happy user of Square Cash as a result.

rhodysurf 8y ago
Sort of. It shows who paid who and their comment, but it does NOT show how much money was exchanged.
- Djvacto 8y ago
  Yep. I made mine private by default, but it is basically just a way to send a friend money, that if you leave it public to other friends, is just a way to share jokes. Paying a roommate for utilities but setting the description to the tongue-out emoji and an eggplant, or something similarly silly.

briandear 8y ago

Of course not everyone has an Apple device, but person-to-person Apple Pay is really slick and, based on my amateur analysis, very secure.

meesterdude 8y ago

haha I actually tried using Zelle a few days ago - "oh look, the banks are joining the future! lets try this". WRONG. Super convoluted and couldn't get it to work in the end, even after calling customer service. Paypal was 30 seconds. Zelle is Helle

jrs95 8y ago

Venmo itself has had a long history of the same issues. The main problem here for Zelle is that they should have seen this coming and handled it a bit better.