Zelle Has a Problem

Zelle is one of the coolest things to come along since … well, for a very long time. Introduced last year, Zelle lets you transfer money between bank accounts, in different banks, instantly, for free. Zelle was under development for a while, then suddenly just showed up without warning. Support for and from most major American banks was built in, day one. POOF!

Zelle works just the way it’s described, and that’s trouble for the PayPals of the world. PayPal thought they were smart when they bought Venmo, but Venmo does account transfers overnight, not instantly (update: this has since been rectified, but also carries a fee at Venmo). With Zelle, you send money from one bank to another and it’s transferred immediately.

And Zelle Has a Problem.

I’ve been using Zelle since the day it arrived. I loved it on day one, today, and every day in between—until one of my banks changed policies. When I decided to close a checking account at Bank of America and replace it with one from CapitalOne I discovered that because both of those accounts were linked to the same email address there were some hoops to jump through. That’s a problem, but it’s not the problem.

The problem with Zelle is that its member banks aren’t telling a consistent story about those hoops. Consumers can’t talk to Zelle, which is by design. Neither, it seems, can the banks—at least not informally to clear up issues as they occur.

I asked Bank of America how to get them to release my email address and they said it would happen automatically when the account was closed. That turned out to be wrong. I asked CapitalOne how to get them to “take it” and they said that associating an address with the CapOne/Zelle gateway would do the trick. “Last In” would rule, they assured me. Also wrong. Zelle has a problem? No, Jeff had one.

In fact, the most basic tenet of Zelle interbank play—that an email address can only be associated with one bank—isn’t correct either. A Bank of America relationship manager told me about that and explained it; you can only RECEIVE money at one bank at a time, but if you associate multiple accounts with one email address they can all SEND money to that one account. I’ll assume that’s true; he had no reason to make it up.

What I found out this week was that there is no “take it” as CapitalOne had described. When I hooked them up CapitalOne became the second bank in line to use the email address that Bank of America was already using with Zelle. But it couldn’t receive funds, and Bank of America’s instructions that once I closed my BofA account it would get out of the way turned out to be wrong, too; I tried sending money to CapitalOne after the Bank of America account was confirmed closed with a zero balance. That money went to Bank of America, which, yes, un-zeroed the balance.

But it didn’t re-open the account, which is now closed but has a bit of money in it. Or at least that’s what Bank of America claims. I can’t see the account. It is likely still closed, but I can’t confirm the part about the balance.

Zelle Has a Problem

What all of this comes down to may be that Zelle has no problem at all. But Zelle is creating problems. Problems for its partners. Problems for banking customers. Yes, problems for itself, but not as long as the banks keep playing with Zelle and shielding Zelle from we mere mortals. And with no Zelle substitute on the horizon there’s no reason to believe Zelle cares. But there’s a cautionary tale here.

Zelle sits in a perfect position, performing a service for a lot of big and traditionally un-nimble players with very little incentive to leave Zelle for someone else. That said, we’ve seen multiple examples of coulda-shoulda-woulda money exchange services from big companies trying to be your favorite middleman. I stopped caring about Google Wallet years ago, for example. And I’ve never witnessed anyone actually using tap-to-pay with an Apple Watch. Not once. And I live in New York City.

At the end, it all comes down to customer service. So yes, Zelle has a problem and regardless of how it plays out needs to address it.

Not sure you have your customer service issues under control? Let’s talk about it.

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