Credit Card, PayPal, Venmo Vs Zelle

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#1
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I guess finding the best way to accept electronic payment from our clients is crucial to everyone of us in this forum these days.

Yesterday, I found that there is a service called Zelle. A client made a payment with it.To my surprise, the credit showed up in my account within just a few minutes. And based on what I read, there is no charge at all to use the service.

Therefore, my question is…since Zelle is so convenient, easy to use and does not charge a service fee, why most businesses are still only taking credit card, PayPal, Venmo, etc which all come with a service fee?

What are the downsides, if any, to use Zelle?
 

#2
JR1  
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I've NEVER received a payment from Zelle and there's no customer service. Bank doesn't know. VENMO works!!! Awesomely. And I'm finding more people using it now.
Go Blackhawks! Go Pack Go!
Remembering our son, Ben Jan 22, 1992 to Aug 26, 2011.
For FB'ers: https://www.facebook.com/groups/BenRoberts/
 

#3
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I understand for your professional image, it is better to use services such as Paypal or Venmo as you can send a professional looking invoice to your clients. They do incur a 3%-4% charge to use their service though.

You cannot issue an invoice through Zelle and that is a major downside as I can see now. But the service is free though.
 

#4
JR1  
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Then separate them. I don't invoice thru them, merely get paid.
Go Blackhawks! Go Pack Go!
Remembering our son, Ben Jan 22, 1992 to Aug 26, 2011.
For FB'ers: https://www.facebook.com/groups/BenRoberts/
 

#5
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I use whatever is accepted via QBO invoicing -- credit or debit cards on the "big four" networks, e-checks/EFT, and Apple Pay I believe. Plus, regular paper checks if the client isn't comfortable paying online.

It's my understanding that a lot of these services... Venmo et al are supposed to be for personal use only. Not transacting business.

I welcome the competition though. Maybe those 3% processing fees on debit and credit cards will fall....
 

#6
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I checked with my bank. And their customer service said Zelle does work with a business account.

And I agree with you about the service fee. Paying close to 4% per transaction is quite steep in opinion. Hopefully the competition will bring down the rate as you said. I think if the rate can be brought down to 2%, it would be a no brainer to use PayPal or Venmo as I really like their invoicing service.
Last edited by MeaningfulIdea on 17-Nov-2021 4:29pm, edited 2 times in total.
 

#7
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How does that work? You give the client your routing and account number?
 

#8
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ManVsTax wrote:How does that work? You give the client your routing and account number?


You send a request for payment from your bank account, either to their cell phone number or email address. The client receives the request right away. They then send you the payment and the credit shows up in your bank account within minutes.

One potential difficulty is that it looks like the client has to register with Zelle in order to send the payment.

So that may be another downside to use Zelle.
 

#9
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MeaningfulIdea wrote:One possible difficulty is that it looks like the client has to register with Zelle in order to send the payment.

So that may be another downside to use Zelle.


Yup. Not may...is...

We should strive to make each step of an engagement as frictionless as possible for clients.

I like the idea of paying less though.
 

#10
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I agree with you on this too. But as electronic payment is getting so popular these days, I guess more and more people will register with Zelle for many other reasons. Like this client that sent me the payment, she is registered with Zelle already so it took her just a minute to send the payment to me. I am thinking it was actually much easier for her to use Zelle in her case.
 

#11
Keyad22  
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Two third of my clients Zelle me the payments. I email the invoice; my clients paid immediately; I received email confirmation in minutes. Done. It is so convenient! I deposited the paper checks received on my cellphone. The bank send me email confirmation immediately. Have not go to bank physically for a long time.

There is no charge for the business account to use Zelle,

As a small business client, you may be able to send up to $15,000 per day with Zelle through banks.

The Zelle will tell who send the payments. I export the data from my bank account to my QuickBooks. All Done!

I suggest you try it. It is really convenient.
 

#12
CathysTaxes  
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My clients like Zelle. In fact it was a client who requested it. Clients that used to use Paypal are now using Zelle!
Cathy
CathysTaxes
 

#13
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Zelle is free for businesses? Hmm. There is no such thing as a free lunch do what’s the catch? I did see an online article that suggests the freeness is because of COVID-19.

Edited to correct "Seller" to Zelle. I blame my iPhone and the early hour.
Last edited by SumwunLost on 18-Nov-2021 7:57am, edited 1 time in total.
 

#14
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SumwunLost wrote:Seller is free for businesses? Hmm. There is no such thing as a free lunch do what’s the catch?


I was thinking the same thing...while I love constant improvement, "free" usually means the business plans to monetize your information and sell it. There's always a cost.
 

#15
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Wow, I kind of feel like Charlie Brown in a cartoon I once saw. He was sitting on a rock mulling over life and the balloon bubble said "Isn't anyone named Bill or Tom or John anymore?

I accept credit card payment through Intuit which works for me. During the scariest part of the pandemic I was emailing invoices and they all had the ability to be paid online. I really didn't want to go into town to the PO. A lot of people used the green button to pay their bills with a credit card, but once that all settled down, they went back to checks. I have two clients who pay via credit card each month. My business is very small though and geting smaller.
 

#16
Taxaway  
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I offer all options (Square, both in-office swipe and emailed link, Paypal, Venmo, and Zelle), let the clients choose and hope they opt for the latter two which have no merchant fees! My invoice is included with the client tax return, and the email summary offers the payment choices with instructions.

MeaningfulIdea wrote:One potential difficulty is that it looks like the client has to register with Zelle in order to send the payment.

While clients need to create an account with Venmo and Paypal, I find many (other than senior citizens) already use it and more are fortunately using Venmo. Zelle is an option used by many banks so clients aren't 'really' signing up separately, they access it via their bank account/Zelle app if available through their bank. Half-correction?: they can link a credit card with Zelle so I guess that counts as signing up for those who want to do it that way.
 

#17
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I been using Zelle for the last two years.....more and more clients use Zelle to pay.

It's free. I am with Bofa. Venmo is convenient but cannot accept business payement, can only transfer to personal bank acct. Paypal is convenient but they charge 3% once they find out you are a business. Zelle is the best free option right now.
 

#18
HowardS  
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+1
Retired, no salvage value.
 

#19
zl28  
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In quickbooks, where says edit payment instructions, i put in a little note that says i accept Zelle and to use my email address to pay that way.

Zelle is very nice.

Don't have to pay those 3% fees.

Though with quickbooks now, client can pay by bank transfer

and i think that might be a 1% charge.
 

#20
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I use Bill.com and the associated credit card and ACH merchant that comes with it and my merchant fees have never been lower.

Not sure about Zelle, but I used to use Chase Paymentech for cards and PayPal for online payments.

Those were MUCH more expensive and they did not provide nearly as much time-saving automation as Bill.com. I have saved a plethora of time and admin labor costs with that software. Note that setting it up was a very time consuming project.
 

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