September 21, 2021
Paying with Zelle

The world of payment technology was static for a long time. People primarily had cash, checks, or credit cards, and those were their options for many years. Then, digital wallets and other types of electronic payments took off.

Today, there are countless platforms and technologies your ecommerce business can use to make payments easier and safer for your customers. The tricky part is deciding which of them to use and integrate with your ecommerce shop.

How do you decide? You start by getting an in-depth view of your options.  Zelle, for example, is a popular choice for secure payments across the US.

What Is Zelle?

Zelle is a bank-to-bank transfer payment system. It’s unique because it’s actually owned and operated by banks. Essentially, what you have is a large group of banks that came together, formed a trusted network, and created a singular platform that all their customers can use.

Zelle actually began as an exclusively consumer-to-consumer system. People could use it to split checks, loan or share money between friends, and so on. After this was successful, Zelle opened up to small businesses in 2018. As a business, you can both receive and send money through Zelle as long as your bank is a Zelle member.

How Does Zelle Work?

Zelle takes an interesting twist on bank transfer systems. When a customer initiates a transfer, their bank immediately removes the money from their account and sends it to Zelle. Zelle puts that money into a settlement account because they’re using ACH payment processing and it takes time to settle these transfers.

In the meantime, though, because Zelle trusts the bank that sent the money (the customer’s bank), they immediately transfer the same amount of money to your account. When the original payment is settled, Zelle takes it to recoup the funds they had already sent to you.

In effect, unlike most bank transfer systems, you receive your money instantly and Zelle is the one waiting for the payment to process.

It’s important to note, though, that Zelle itself is set up for traditional, in-person businesses rather than ecommerce businesses. To integrate Zelle into your ecommerce site, you need to use an integrating platform like Macropay. When you do, though, customers can safely and efficiently complete transactions using a payment system they already know and love.

Advantages of Zelle

If you’re looking for new payment options for your business, Zelle could be a helpful and profitable addition. In fact, there are several benefits it offers to your business.

  • Fast Transactions – As we noted above, Zelle’s claim to fame is that, unlike other bank transfer systems, it delivers your funds within minutes and those funds are immediately available for you to use. While the electronic process of completing and settling the transfer doesn’t take any less time, Zelle operates on a foundation of trust among their member banks, so they’re footing the bill while waiting for the transfer to settle.
  • Wide Customer Base – A key reason for expanding your payment options is to provide desirable choices for as many potential customers as possible. Zelle certainly suits that need. Not only does the Zelle network have over 400 member banks, but it’s owned by several of the largest US banks. Any customer who banks with any of these banks has immediate access to easily and securely use Zelle. According to Zelle, that includes about 100 million Americans.
  • No Chargeback Risk – Chargebacks are an increasingly prominent risk for businesses, as payment providers so often simply comply with customers’ chargeback requests regardless of how legitimate the purchase is. Fortunately, though, Zelle does not allow chargebacks. You can rest assured that you won’t be left without your product and your payment, and you’ll skip potential chargeback fees as well.
  • Easy Access for Customers – Many customers already know about Zelle and use it for their personal purposes. Even for those that don’t, though, Zelle is appealing because it’s particularly easy to use. Any customer who banks with a Zelle member bank can use Zelle with no extra setup or sign-up process. If they don’t use a Zelle member bank, though, they can still quickly set up a Zelle account using their debit card.

Disadvantages of Zelle

As popular as Zelle is, there are plenty of disadvantages to keep in mind as well before you integrate it with your ecommerce site or otherwise use it for your business.

  • Varying Transfer Limits – Zelle is unique because transactions are widely controlled by the individual banks that are involved in them. This gets complicated because each bank can set its own rules and limitations. For example, many member banks have limits for the number of outgoing transactions and total dollar amount of outgoing transactions you can make within a certain time period. They often have higher limits for businesses than for individuals, but it’s important to check your bank’s limitations first.
  • Varying Fees – Much like limitations, fees for Zelle transfers are set by the individual banks. Some banks charge no fees, others charge only for incoming transfers, and so on. Find out your bank’s specific fee schedule and make sure it’s affordable for your business.
  • No International Access – Zelle was started in the US and it is exclusive to the US. Both the sender and the receiver’s bank accounts must be US-based for you to complete a Zelle transfer, so note that only your US-based customers will be able to use it.
  • No Recurring Payments – As is typical for bank transfers, Zelle payments must each be initiated and authorized individually. This means that you cannot set up automated or recurring payments with Zelle. If you use a subscription model, you’ll need to have your customers complete a separate transaction for each payment.
  • Reduced Access for Businesses – As we mentioned above, consumers can use Zelle if they bank with a Zelle member bank or if they set up a Zelle account with their debit card from another bank. For businesses, though, you may only use Zelle if your bank is a member of the Zelle network.

Overall, Zelle can open doors for secure, fast, low-risk payments from consumers throughout the US. To learn how to integrate it with your ecommerce site, get a quote from Macropay today.

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