Digital payments network Zelle has shut down its mobile app as of April 1st. This has come as a result of very few customers using the app to make payments, instead using Zelle through their bank or credit union.
As a result of the change, customers of Zelle will now only be able to make payments via a financial institution that offers it. The company was launched in 2017 and is available in over 2,200 U.S. financial institutions.
Although Zelle’s main reason for shutting down its app is because of lack of use, the move could also be seen as an attempt to improve safeguarding and fraud detection within the network, especially since the company has been a prime target for scammers in the past.
Why Is Zelle Abandoning Its Mobile App?
According to a press release by Zelle, only 2% of transactions take place via its app, with most customers using their bank or credit union to send money to their phone contacts. With so few people using the app for payments, it makes sense that Zelle would want to free up time and money by abandoning the feature.
Instead, the app will serve as a hub for financial education, giving information about scams and fraud, as well as providing a list of the institutions that offer Zelle. With the focus now completely on these institutions, Zelle could be shifting its focus to onboarding more of them in the coming years.
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Zelle made the announcement at the end of October 2024, and have been slowly phasing out the ability to make app payments. Since then, users have been encouraged to use Zelle through a bank or credit union that offers it, and customer service support remained in place for those using the app.
How Will Future Payments Be Made Through Zelle?
Instead of using the app, businesses are encouraged to enroll in a financial institution that offers Zelle in order to continue using the service in a safe and regulated way, receiving money from and sending money to trusted contacts.
Zelle saw an increase of 16 million consumer and small business accounts from 2023 to 2024, going from 135 million to 151 million accounts. Zelle has been highly beneficial to small businesses, from offering customers flexible ways to pay to rewarding employees with upfront bonuses that go straight into their bank account.
In a statement, general manager of Zelle Denise Leonhard said the company remains the “go to peer-to-peer payment method for millions of hardworking Americans,” and explained that the company remains focused on expanding and unlocking opportunities for individuals and small businesses alike.
Should Your Business Look Elsewhere for a Payment App?
Despite the changes, we wouldn’t advise businesses to abandon Zelle just yet, as most of the payments made will not be impacted. If you do use the app, we would encourage you to enroll into a financial institution that offers Zelle payments.
You may also be concerned about the risk of scams when making payments through networks such as Zelle. As money is transferred directly from bank account to bank account, there are potential security risks. This is something we have seen happening not just through Zelle, but with similar services such as PayPal.
However, if you have been concerned with using Zelle in the past, these changes could see better fraud protection and security measures put in place as payments must be made through secure financial institutions. The new educational value of the Zelle app could also be evidence of the company aiming to improve its security measures.
