Zelle vs. Venmo: How they compare

Young woman using smart phone at a cafe tableImage: Young woman using smart phone at a cafe table

In a Nutshell

Peer-to-peer payment services like Zelle and Venmo can be great ways to send money to friends and family — and possibly even pay for goods and services. Let’s take a closer look to see how Zelle and Venmo compare.
Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted.

Peer-to-peer payment systems like Zelle and Venmo can help you easily send and receive money from other people. But how do you decide which P2P system is right for you?

Before you choose a P2P app, it’s important to understand how each option works, what types of fees they charge, their security measures and how long it could take to move money using the payment app.

Let’s compare two popular options: Zelle and Venmo.

Zelle vs. Venmo

Zelle and Venmo are two popular choices for sending and receiving money among friends, family and others. They work similarly but have some key differences.

Zelle vs. Venmo at a glance




Must sign up to use



Send and accept peer-to-peer payments



Can use credit cards for payments



Can use to purchase goods



Can send money to international accounts



Can keep money in account



Charges fees



FDIC insured



Can share activity on social networks




Zelle moves money directly between linked bank accounts and doesn’t charge fees for using its service, but your bank or credit union may charge fees for using Zelle. Venmo users maintain a separate holding balance that gets refilled or depleted as transactions are made. Your Venmo balance is funded by a linked U.S. bank account, debit card or credit card. Venmo is mostly free (with a couple of exceptions). Another big difference? Venmo has a social element that Zelle lacks. It allows users to see and comment on each other’s transactions, even with emojis.

Here are the ins and outs of Zelle and Venmo so you can figure out which one is right for you.

What is Zelle?

The Zelle payment network launched in 2017 as a mobile banking feature for banks participating in the network. The app also launched in 2017.

Zelle allows users to make peer-to-peer transactions, either requesting or sending money, using email addresses or mobile phone numbers. The P2P company moves money directly between the bank accounts of senders and recipients. 

How does Zelle work?

To use Zelle, you’ll first need to enroll. You can do this by downloading the Zelle app and enrolling there. Or you can sign up through your bank’s mobile app if your financial institution participates on the Zelle network.

If you’re enrolling through the Zelle app, you’ll need to sign up with your contact information, email address and mobile number. And you’ll have to add a Visa or Mastercard debit card that’s linked to a domestic bank account.

If your bank or credit union participates in the Zelle network, you’ll simply create a Zelle profile for yourself in your bank’s app or online site.

You can use Zelle to send money to virtually anyone, as long as they have a U.S. bank account.

How fast is Zelle?

If you and your recipient are already enrolled in Zelle, transactions typically take only minutes to process. But if your recipient isn’t a Zelle member, they’ll have to enroll to receive their payment. Depending on your bank, they could receive the money right away, or it might take up to three business days. And if your recipient doesn’t sign up for Zelle within a certain amount of time after receiving notice of your payment, the transaction could be cancelled, and the money released back into your account.

How much does it cost to use Zelle?

Zelle doesn’t charge you to send or receive money, and your bank or credit union may not charge a fee either. But it’s a good idea to also check with your bank or credit union to make sure there aren’t any other bank fees that might apply.

Is Zelle safe to use?

No payment method is completely risk free, so we can’t say for sure whether Zelle is safe to use. That said, Zelle says it has multiple security features. The platform says it relies on authentication and monitoring features to help secure payments. Plus, if you use Zelle through your financial institution’s mobile app or online banking dashboard, your bank’s safeguards, which may include being FDIC insured, may also come into play. 

But while sending money with Zelle doesn’t require you to share sensitive financial or personal information with the recipient, Zelle (like many banks) recommends you only use the platform to send money to people you know and trust.

What can’t Zelle do?

Zelle is great for users based in the U.S., but if you’re trying to receive or send money to an international bank account, you’ll have to find another way. Right now, Zelle doesn’t accept credit cards as forms of payment either, meaning you’ll have to have a U.S.-based bank account to fund your purchases. And while transactions move almost instantly from bank to bank, cancelling a payment once it’s in process is nearly impossible, unless the recipient hasn’t enrolled in Zelle.

What is Venmo?

Owned by PayPal, Venmo allows individuals to send money to and receive money from other individuals. You can also use it to buy goods and services from a variety of companies, including Uber, Seamless and J. Crew.

If you’re considering using Venmo to make or receive P2P payments, here are some things to consider.

How does Venmo work?

Like Zelle, Venmo allows users to send and receive money using an individual’s phone number or email. Both users must have a Venmo account. If a recipient doesn’t have an account, they’ll have to create one.

But there’s a fundamental difference between how Zelle and Venmo work: With Venmo, you can hold a balance in your account. Where Zelle transfers money directly between bank accounts, Venmo’s exchange takes place between Venmo accounts and balances (or if you don’t have a balance, it will draw from your linked bank account).

Say you receive a payment through Venmo and want that money in your savings or checking account. You would have to move it there afterward by transferring your Venmo balance to your linked account or eligible debit card. Likewise, if you want to make a payment for an amount larger than the balance in your Venmo account, you’ll need to add money to the account to cover the payment. If your Venmo balance doesn’t cover the entire amount, the payment will be funded by the external payment method you’ve linked to your account.

You can access the payment system by downloading the Venmo app on your mobile device or visiting the Venmo website.

Venmo also has a social element — the app allows users to follow friends on its timeline and see what their contacts are up to, like who they’re paying and for what. You can view, like and comment on purchases, and even use custom Snapchat Bitmojis.

How much does it cost to use Venmo?

Venmo doesn’t charge users to send money using their Venmo balance or linked bank account, debit card or prepaid card. But if you want to send money using a credit card, be prepared to pay a 3% fee. You’ll also pay a 3% fee if you send money and opt for purchase support.

There’s no charge to receive money through Venmo.

Transferring money from your Venmo account to your linked bank account usually takes one business day and is free of charge. But if you need access to the money instantly, and opt for an instant transfer, be prepared to pay a 1% fee.

Is Venmo safe to use?

As with Zelle, we can’t say for sure whether Venmo is safe to use. Venmo recommends only using its platform to send payments to people that you trust. Venmo says that account details are protected by encryption, account activity is monitored for unauthorized transactions, and you can even add a PIN code for extra security.

You’ll also want to keep in mind that the funds sitting in your Venmo account are not insured by the FDIC, meaning the federal government is not insuring those funds against loss.

And you’ll want to use caution sending or receiving money with strangers, particularly for potentially high-risk transactions, like making a purchase or sale through an online site that connects individual sellers and buyers. And since Venmo doesn’t offer purchase support for all transactions, you’ll want to be extra cautious completing transactions with people you don’t know.

Learn more about PINs and how they work

What can’t Venmo do?

In order to use Venmo, you’ll have to be physically located in the U.S. and have a U.S. cellphone that can send and receive text messages — meaning no international transactions. Cancelling a payment that’s already been sent is not possible, unless the recipient isn’t a Venmo user. If you sent the wrong amount or accidentally sent money to the wrong contact, you have a couple of options: You’ll have to either send that user a request for the same amount and include a note asking them to pay you back for the money sent by mistake, or you’ll have to request it back through Venmo — but note that Venmo says it can’t guarantee that it can recover the money.

Bottom line

Zelle and Venmo are both popular choices for sending and receiving money among friends, family and other individuals you know and trust. They work similarly in many respects — but they also have some important differences.

Zelle doesn’t use a separate balance for holding the money you’ll be moving with the app. Funds are drawn directly from your bank account. But you can’t use a credit card with Zelle. And while Zelle doesn’t charge fees for using its service, certain bank or credit union fees may still apply.

Venmo accounts use a separate holding balance, but you can make payments using a credit card (for a fee). Most Venmo transactions are free (with a couple of exceptions), and Venmo has a social aspect, allowing users to share, view, like and comment on transactions, and even use emojis.

Before deciding to use either of these P2P apps, it’s important to carefully weigh each platform’s features, fees and limitations. And remember, you’re not locked into using only one app. You can always pick and choose your preferred way to transfer money, depending on the situation.

About the author: Sarah Archambault is a freelance writer based in New England. She enjoys learning new ways to spend money wisely and helping others figure out how to make smart financial decisions. Sarah is a graduate of the Newhouse… Read more.