Financial applications that utilize the peer-to-peer operating method are becoming more normal each day. That is because they offer a smooth way of sending and receiving money to each other. Zelle has made a name in the list of these apps. It is a financial service working in the US.
An interesting thing about this app is that it doesn’t charge money on transactions. This makes people wonder How Does Zelle Make Money. We will discuss this in today’s article along with its business model. Let’s start.
What is Zelle?
Zelle is a financial application working in the United States. It is basically used to send and receive money using different bank accounts. There are hundreds of banks attached to this application. This indicates that the user can make transactions using their own accounts directly.
This app’s easy usage method has made it a lot popular among people. Absolutely no complicated steps are involved in its working process. You will get to know more about it in the next section of this blog.
How Does Zelle Work?
The working mechanism of this app is very easy to understand. Let’s break it down into different factors.
Bank Integration:
Bank integration is one of the basic and most important parts of Zelle’s functionality. That is because almost all the transactions are going to take place from them. The app itself doesn’t have an account. You will also have to provide different other pieces of information such as email address.
Sending money:
Once your account is integrated with the app, you can start sending money through it. The app guides you in a proper way about how you can do that. You will have to provide the recipient’s US mobile number (and email address) for that.
Receiving money:
The recipient also has to integrate their bank account on Zelle. They will receive their money instantly after the transaction has been made.
How Does Zelle’s Business Model Work?
The functionality of the business model of this app is important to understand. That is because it will assist us to know how does Zelle make money. These points can help you understand this model:
Free on the user’s end:
An important thing to understand about this app is it is completely free on the user’s end. The app is completely free to download. Integrating your bank account with it is also costless. It doesn’t even charge a fee on the transaction you make.
Percentage from banks:
Zelle has an agreement with the integrated bank to take a percentage of every transaction as revenue.
Future integrations:
Zelle is reportedly working on making some future integration in itself. This may include their own debit cards or accounts.
Overall, the whole model explains two major things:
- The app doesn’t charge users.
- It earns a small percentage of transactions from users.
So…
How Does Zelle Make Money?
The business model we explained above clearly explains the way Zelle makes money. The following points will clarify it further:
- Whenever a user makes a transaction, a percentage is charged to the bank by the app itself.
- The nature of this percentage isn’t disclosed properly by the application.
- It is also possible that the app makes money on a volume-based fee structure.
This information may trick you into thinking that the app doesn’t earn a lot of money. However, that’s not true. When you take a look at the overall transaction volume made throughout the country, you know that the business is making millions.
For example, a report shows that the app made a record transfer of a total of $307 billion in total a few years ago. This amount came from around 1.2 billion transactions. This clearly explains how much money the business makes yearly.
Conclusion
To conclude it all, Zelle is one of the most successful financial applications in the US. It is basically used for transferring money to families and friends. This indicates that the app has a very user-friendly method of making transactions. It utilizes the existing bank accounts of users for that.
The app itself is completely free to use. It also doesn’t charge for making transactions. So, how does Zelle make money? It does it by charging a percentage on each transaction from the integrated bank. We have explained its business model in detail in the information given above.
Frequently Asked Questions (FAQs)
How much money does Zelle make?
There is no authentic information available about how much money this business makes. Its indirect nature of making revenue is a reason for that.
Is this app free to use?
Indeed. From the user end, this app is completely free to download and use.
Is the percentage of transactions fixed for each bank?
Probably not. The app may have a different fee structure for each bank they are integrated with.
Is this app a safe way of transacting money?
Yes. This app is one of the safest and fastest ways of transferring money to families and friends.
