Through this post, we’ll be discussing all about Chime and Zelle vs. their competitors. What are the competitors of Chime and Zelle? What are the pros and cons of these companies? Which is the best among them? You will find the answers to these questions if you scroll through this post.
What is Chime?
Chime is an online banking application that provides a free checking account along with a debit card that bears the company’s logo.
Chime itself must be emphasized as not being a bank. In reality, it collaborates with another bank that offers the required banking license. Fortunately, users can still benefit from fundamental security measures as accounts are FDIC-insured up to $250,000 in value.
Unlike conventional consumer banks like Wells Fargo, Chime does not run its own network of branches and ATMs. As a result, it can provide a significantly more affordable banking experience and use some of the savings to do away with overdrafts and other fees.
What is Zelle?
Currently, $490 billion in transactions are made through Zelle each year. It processed 1.8 billion transactions in 2021 while expanding by nearly 50%. At this time, Zelle does not capitalize on its popularity and derives no revenue from fees or other sources.
When it comes to P2P payments, Chime also faces off against Zelle. Through the company’s Pay Anyone feature, users instantly transfer money to one another. Each person is given a ChimeSign, a special ID that serves as a username.
Chime and Zelle’s competitors
Venmo is one of Zelle and Chime’s main competitors. It is best known as a peer-to-peer payment app that allows users to send money to one another for free. It was not only the first widely available app to do so, but it has also grown in popularity due to its use of communication tools such as emojis and GIFs.
However, Venmo’s social features have caused problems for the company. PayPal had to settle with the FTC in February 2018 following a complaint about the company’s handling of privacy disclosures. In March 2021, US President Joe Biden’s Venmo account history was made public, exacerbating the need for increased security.
Venmo has since evolved into many other services that resemble those of a bank account. Users can, for example, pay merchants, apply for a debit or credit card, earn cashback rewards, and even buy and sell cryptocurrencies.
PayPal has had ownership of Venmo since 2013. Braintree previously purchased it for $26.2 million in August 2012. A year later, PayPal paid $800 million for Braintree and has been running Venmo as a separate entity ever since.
Venmo has a high number of users in the US
Venmo now has 83 million users in the United States. Users transferred $230 billion in total between themselves in 2021.
It should be noted that Venmo, like Chime, is not a bank. That means that funds held in those accounts are not FDIC-insured.
Unlike Zelle, Venmo is a significant revenue generator for PayPal. Annual revenue for the company is currently around $900 million. It may add more banking-like features in the future, such as overdraft protection and fee-free withdrawals.
Venmo, on the other hand, has been involved in several controversies. For example, privacy advocates have criticized the company because of its social focus. PayPal even had to settle with the FTC in February 2018 over a complaint about the company’s handling of privacy disclosures.
2. Cash App
Cash App is ranked as the third most popular P2P app in the United States.
The Cash App, like Venmo, is likely to include more banking-like features to lure customers away from traditional banks and Chime. Block purchased BNPL Afterpay for $29 billion in 2021 and plans to integrate those services directly into the Cash App.
What are the benefits of Chime?
- Chime has no monthly fees, overdraft fees, or requirements regarding a minimum balance.
- Excellent savings options with high-interest rates
- Direct deposit allows you to receive your payment up to two days earlier.
What are the disadvantages of Chime?
It is not possible to use a debit card to top up or deposit money into the card.
Customer service is not always accommodating.
What are the advantages of Zelle?
- Zelle offers several advantages compared with Venmo. Among them are:
Zelle doesn’t charge fees.
- Money is typically sent through Zelle in a matter of minutes and is immediately available to the recipient.
- Earning interest on funds held in Zelle-connected checking or savings accounts
What are the disadvantages of Zelle?
Just as with any app, Zelle has disadvantages. They include:
- Inability to cancel a payment after it’s been sent if the recipient is enrolled in Zelle
- No Zelle-branded debit or credit cards are available.
- You cannot link a credit card to a Zelle account.
What are the advantages of Venmo?
- No monthly or annual fees
- You can use Venmo for in-store or online purchases.
- Availability of Venmo-branded debit and credit cards
- Ability to keep a money balance in your Venmo account
- The social media-inspired features can be appealing to many users.
What are the disadvantages of Venmo?
- You have to pay fees for some services they offer.
- Unless you change your privacy settings, your privacy might be compromised.
- Money is instantly unavailable unless a fee is paid.
- There is no possibility of earning interest on deposits made using Venmo transaction restrictions, such as a weekly cap of $4,999.99 for payments made to individuals. (Zelle has some transaction limits, but your bank or credit union, not Zelle, determines them.)
What are the advantages of the Cash app?
- Invest in stocks with no commission fees.
- The Cash app can also be used for commercial transactions.
- It’s simple and fast to use and get started.
- Make and receive mobile payments with ease.
- If you need to send money, all you need is the recipient’s email address and phone number.
- A transaction will only take several minutes to a few days.
- There are no charges for peer-to-peer transfers.
- You have the choice to buy and sell bitcoin, too. It is a special feature, as it is unavailable for other mobile payment services.
What are the disadvantages of the Cash app?
- If you use a credit card, you must pay a 3% fee.
- Not applicable internationally.
- There are still some markets where it is impossible to purchase bitcoin or a Cash App card.
- Some features that are crucial to some people are still lacking.
- The 30-day initial low early limit
- You will pay 1% of the deposit amount if you select the instant deposit option.
does not include protection from the Federal Deposit Insurance Company.
There you go! In this post, we discussed Chime and Zelle vs competitors. Zelle and Chime both help with managing your finances. They do have tough competition with companies such as Cash App and Venmo. All these companies come with their pros and cons. So it is up to you to go with the most suitable option for your situation. For example, if you want a place to hold funds, Venmo is a good option compared to Zelle. On the other hand, if you want the quickest and cheapest option, Zelle is a good option for you.