Zelle vs Venmo vs Paypal
The increasing popularity of digital currencies and international transactions observed today is corroborated by a rise in the need for digital wallet services. Like with cryptocurrencies that seem to be becoming innumerable, since the introduction of the very first digital wallet, PayPal, several others have joined the market, plaguing users with the question of the best option. As with most other things, research has demonstrated that there is no one-fit-all choice here since several constructs determine the propitiousness of digital wallet services. After comparing several constructs of different pairs, namely, PayPal vs. Venmo, Zelle vs. Venmo, and Zelle vs. PayPal, the following conclusions were drawn. Given that all three platforms out offer near equal services pertaining to ease of use and security:
It can thus be observed that each digital wallet option has a predominant niche and, as such, can all be used by a single user if necessary. Having discussed the gist of the matter, let us now focus on improving your knowledge on the subject matter by exploring how we came to these conclusions. To do that, let us explore our need for peer-to-peer payment systems. Over time, and with the advancement of technology, there has been a progressive growth in the interdependence of the world's cultures, economies, and populations through cross-border trade in goods and services, the flow of investment, people, and information and technology. An increased need for media of exchange and payment among consumers and countries exists, owing to this interdependence of economies and the open flow of goods and services, information, and technology. Factor in the digitalization of currencies it is evident that more transactions are and can be conveniently processed online with minimal need for displacement.
Defined as a decentralized platform that enables two individuals to interact directly without intermediation by a third party, peer-to-peer (P2P) services have established a rein on the global market and are purported to increase by double digits across all age groups by the end of 2021. Foremost in the industry are the apps Paypal, Venmo, and Zelle. Despite their individuality and uniqueness, all three digital wallet services serve a common purpose, and at the end of the day, the question of which option to employ is determined by comparing several aspects, some of which include accessibility, affordability and cost, customer service, ease of use, reviews, security, and versatility. However, as already mentioned, because all three digital wallet services serve a common purpose, several overlaps exist between them. Below, we shall expound on the uniqueness of each payment option and the differences between different pairs (Zelle vs. Venmo, PayPal vs. Venmo, Zelle vs. PayPal), and finally between all three Venmo vs. PayPal vs. Zelle. However, first, let us talk about each one.
PayPal
PayPal is purported to be the oldest digital wallet service in existence, and its credibility is founded on its over two-decade history in the security software business (as Confinity) and in online banking (as X.com). Serving as an electronic alternative and payment processor for commercial users for a fee, PayPal has slowly but steadily gained ground and established roots in over two hundred markets, supporting over twenty-five different currencies globally, and registered over 377 million active users. Robust, safe, and secure, PayPal is easy to use and customizable for merchants and small businesses. And as if that is not enough, in a dispensation where (digital) security and the need to respect and preserve one's privacy is of the utmost concern, PayPal enables its users to execute transactions without the need to input their financial information onto websites. Despite all these, like with everything else, PayPal has both cons and pros, several of which are listed below
| PayPal Pros | PayPal Cons |
|---|---|
| It is available in over 200 countries and has a relatively high transfer limit | It has relatively high transaction rates |
| It supports (receives, sends, and holds funds in) over 25 currencies | It has a relatively long transaction speed |
| It has a user-friendly interface and is customizable for small businesses | High business user complaints |
| It is equipped with Fraud, Buyer, and Seller protection | It charges for credit/debit card transactions |
| It presents multiple alternatives to fund your account – credit card, debit card, PayPal balance, and PayPal credit | It can freeze your account |
Venmo
Founded in 2009 and today a subsidiary of PayPal, Venmo was specifically designed to facilitate day-to-day transactions between its users via text or a mobile device. A promoter of public, quick, and safe digital financial transactions, this virtual payment platform constitutes three social feed categories - a Friends-only feed (permits users to make the payment visible to "friends only"), a personal feed (make the payment private), and public feed (make the payment public), making it hype for the millennial population. Easy and quick to use, Venmo is readily integrated with other accounts like Uber, Target, enables the easy splitting of payments, and does not charge a dime for transactions. Listed below is a summary of some of its cons and pros.
| Venmo Pros | Venmo Cons |
|---|---|
| It presents a social media-like persona that enables users to connect with and add comments, emojis, and likes to transactions between their friends | Its transactions can only be done via the App |
| It has a relatively short transaction time | Its availability is limited to the U.S |
| It can split payments between multiple users as indicated | It has a relatively low transfer limit |
| It offers free debit card transactions and syncs contacts and is free from linked bank accounts | It lacks Buyer or Seller protection |
Zelle
Designed to transcend generational barriers to serve Boomers, Gen Xers, and Millennials alike, Zelle, though new to the digital wallet service, aims to meet its goal by collaborating with banks, including Ally, Bank of America, Capital One, Chase, Citi, U.S. Bank, and Wells Fargo. As a result, Zelle boasts a user base that is approximately 71% the size of Venmo's despite its novelty. Because it works in conjunction with collaborating banks, Zelle does not require an additional app since it is embedded into the pre-existing mobile banking apps. Of course, this also expedites transactions and guarantees security. A Zelle profile can only support one bank account at a time. Some of its most prominent cons and pros are listed below.
| Zelle Pros | Zelle Cons |
|---|---|
| Its transactions are speedy with very short transaction times | Its users are limited to those who have a U.S. bank account |
| It offers free transactions | It does not support international transactions |
| It employs top-notch security with the additional service of the participating bank’s existing protections | It does not accept credit cards as a form of payment, only from a designated bank account |
| It is ideal for bank-to-bank transactions | It does not enable canceling a payment once it has been initiated |
| Metric | PayPal | Zelle |
|---|---|---|
| Popularity | About 254 million users | About 27.4 million users |
| Fees | 3% (credit card transactions) and 1% fee for expedited transfers | None except for credit card usage and a fee for instant transfers |
| Limits | None (for verified accounts) | Depends on your bank |
| Compatibility | App (Android, iOS) and Web | App (Android, iOS) and bank app |
| Scope of transactions | International | Domestic |
| Speed of transactions | 3-5 business days | Same day transaction |
| Recipent info required | Email, mobile number, name, or PayPalMe link | Email or mobile number |
| Wallet | Yes | No |
| Metric | Zelle | Venmo |
|---|---|---|
| Popularity | About 27.4 million users | About 38.7 million users |
| Supporting currencies | Dollar | Dollar |
| Fees | None although your bank may charge a fee. | None except for credit card usage and a fee for instant transfers |
| Limits | Depends on your bank | $2999 per week (with verification) |
| Compatibility | App (Android, iOS) and bank app | App (Android, iOS) and web |
| Scope of transactions | Domestic | Domestic |
| Speed of transactions | Same day transaction | Same day transaction |
| Wallet | No | Yes |
| Metric | PayPal | Venmo | Zelle |
|---|---|---|---|
| Purpose | Business transactionsBank-supported | Social P2P transactions | P2P transactions |
| Popularity | About 254 million users | About 38.7 million users | About 27.4 million users |
| Supporting currencies | 25 different currencies | Dollar | Dollar |
| Longevity and credibility | Been around since 1998 | Been around since 2009 | Been around since 2011 |
| Fees | 3% (credit card transactions) and 1% fee for expedited transfers | None except for credit card usage | None although your bank may charge a fee |
| Limits | None with verification | $3999 per week with verification | Depends on your bank |
| Compatibility | App and Web | App and Web | App and bank app |
| Scope of transaction | International | Domestic | Domestic |
| Speed of transaction | 3-5 business day | Same day transaction | Same day transaction |
| Wallet | Yes | Yes | No |
| Addtional features | Permits you to cancel a transaction after initiation | Presents a social-media like persona that gives a playful user experience deisgn | Does not require an extra app if your bank is a participating bank |