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The mobile payment platform Zelle has discontinued its standalone app for sending and receiving money transfers. Despite this change, its services continue to be offered through various financial institutions.
On Tuesday, it was confirmed that users are no longer able to conduct money transfers via the Zelle app, a modification that was initially announced by the company in October 2024. Currently, Zelle operates through “more than 2,200 banks and credit unions” across the United States that provide the service on their websites or mobile applications, as detailed on the Zelle website.
This decision follows findings that only approximately 2% of total Zelle transactions were carried out through the standalone app, according to reports from the company last year.
In December 2024, the U.S. Consumer Financial Protection Bureau initiated a lawsuit against several major banks, including JPMorgan Chase, Bank of America, and Wells Fargo, over claims that they failed to adequately protect consumers from extensive “widespread fraud” associated with Zelle. The consumers involved reported losses exceeding $870 million over a span of seven years.
The lawsuit contended that the banks breached federal regulations by allowing scammers and repeat fraudsters to switch banks while disregarding potential warning signs that could have averted fraud.
In response to the lawsuit, Zelle argued that the claims against the company were baseless and counterproductive, stating that the lawsuit could inadvertently empower criminals, raise costs for consumers, and hinder competition among community banks and credit unions. The lawsuit was subsequently dismissed in early March.
Here’s a summary of the recent changes to Zelle and the implications for its users.
Established in 2017, Zelle is a digital payment network enabling users to transfer funds between bank accounts, even when they belong to different financial institutions.
To access Zelle, users must now enroll through one of the participating banks or credit unions that offer the service via their apps or websites. Those already utilizing Zelle through an affiliated financial institution will find that no further action is required on their part.
Users of the Zelle app have been notified via emails and in-app messages regarding the alterations to ensure all funds within the app are appropriately managed.
A comprehensive directory of the banks and credit unions that provide Zelle can be found at enroll.zellepay.com.
Although the Zelle app remains available for download and accessible to those who have previously installed it, its functionality has altered, as users can no longer carry out transactions through the standalone version.
Source
finance.yahoo.com