Chase Will Soon Block Zelle Payments To Sellers on Social Media (bleepingcomputer.com) 58
An anonymous reader shares a report: JPMorgan Chase Bank (Chase) will soon start blocking Zelle payments to social media contacts to combat a significant rise in online scams utilizing the service for fraud.
Zelle is a highly popular digital payments network that allows users to transfer money quickly and securely between bank accounts. It is also integrated into the mobile apps of many banks in the United States, allowing for almost instant transfers without requiring cash or checks but lacking one crucial feature: purchase protection.
Zelle is a highly popular digital payments network that allows users to transfer money quickly and securely between bank accounts. It is also integrated into the mobile apps of many banks in the United States, allowing for almost instant transfers without requiring cash or checks but lacking one crucial feature: purchase protection.
Popular? (Score:4, Interesting)
Is Zelle "highly popular"? I looked at it when opening a new account some years ago and finding that my bank (which I mostly trust) was pushing it. Quickly decided that using it would be a very bad idea. And given what a shit show most payment apps are...
Fairly, yes (Score:2)
Is Zelle "highly popular"?
I do some online purchases of various collectables from individuals (got tired of eBay fees) and a lot of those take Zelle. I think it has gained some traction since so many banks make it easy to use.
I still personally prefer Venmo for a little separation from my bank. Plus some Zelle integrations have failed for me in the past.
Re: (Score:2)
I think it has gained some traction since so many banks make it easy to use.
The banks are pushing Zelle, because they own it.
Re:Popular? (Score:5, Insightful)
Is Zelle "highly popular"? I looked at it when opening a new account some years ago and finding that my bank (which I mostly trust) was pushing it. Quickly decided that using it would be a very bad idea. And given what a shit show most payment apps are...
I've found me and acquaintances use it to transfer money between family members. I have a handyman I've worked with for years I send money to with it. But I've never used it for somebody I've not met in real life, and can't imagine ever being tempted to do so for any reason. To me, if you wouldn't meet the person to hand them the cash, Zelle is not the answer. It's just more convenient than needing to run to the bank to get the cash, then run across town to hand dad/cousin/etc. whatever it was you were passing back and forth that month for whatever reason.
Re: (Score:2)
Can't you just do a normal electronic bank transfer, through your banking app?
Re: Popular? (Score:3)
Many US banks and credit unions don't offer regular bank transfer options to third parties. You can only transfer to yourself. The typical options for others is wire transfers. Most institutions charge high fees for both domestic and international outgoing wires. The recipient must also share full banking details with the sender, which is not the case with payment apps, including Zelle.
There is a new service called FedNow which my CU supports, but very few institutions do. It is free.
Re: Popular? (Score:2)
As a Briton, this all sounds so wildly backwards.
I wonder what resulted in the UK's system being so convenient and cheap...was there some government pressure, or what?
Re: (Score:2)
As a Briton, this all sounds so wildly backwards. I wonder what resulted in the UK's system being so convenient and cheap...was there some government pressure, or what?
Most likely just a root fundamental issue. UK folks in general don't subscribe to the notion that all business is about bleeding the people dry of funds. Some do, but from what I've seen with my UKian friends, banks don't seem to. Banks in the US are built on the for-profit model, where it's most important to make sure the execs get plenty of bonus money each quarter. Best way to do that? Charge out the ass for basic services.
Re: (Score:2)
Weird.
In New Zealand, transfers between major banks happen almost instantly. Some smaller banks take a few hours to clear. All New Zealand banks can transfer money between themselves.
All you need to an account number and optionally a name to verify against. It's also free for most people.
Re: (Score:3)
Canada, Interac, which runs most of the ATM network, runs a similar thing. All you need is an email address, optionally a security question, and the transfers are pretty well instant, no fees either and covered by most or all banks and credit unions.
Re: (Score:2)
Transfers between banks in the US will usually take three to five business days, on top of the fees they collect for initiating them. Almost guaranteed someone is making some form of interest on that money while it's not available to the recipient or the sender.
Re: (Score:2)
Can't you just do a normal electronic bank transfer, through your banking app?
Certainly, if we want to pay several dollars on top of the transfer.
Re: (Score:2)
Can't you just do a normal electronic bank transfer, through your banking app?
Zelle is a normal electronic transfer through your banking app.
The major banks are Zelle. They set it up as their preferred way to transfer funds electronically between 3rd party accounts.
Since it is an electronic funds transfer and not a "payment app" there is no safety net. If you transfer money to the wrong John Smith, you can't undo the transfer.
Transfers are free, and immediate.
Re:Popular? (Score:5, Interesting)
I don't feel like reading Zelle's TOS again (I skimmed it years ago when someone was asking if they could send me money using it, rather than through PayPal), so I had ChatGPT do it for me - not much has changed. In a nutshell, it's like one step above cryptocurrency when it comes to protection against fraud (specifically, fraudulently initiated transactions, such as if a hacker gained access to your account), but for any transactions where you've legitimately sent the money and the other party turns out to be a scammer, you're pretty much out of luck.
Personally, I didn't find it worth the risk of linking yet another online payment service to my account for what is essentially a digital equivalent of cash. It's probably useful to people who are sending money to distant family members (such as a kid away at college), but is just too risky for online transactions. If you're meeting up IRL you may as well just use cash, and if you're transacting with someone who is going to ship an item, you're better off using a payment service with some form of purchase projection.
Re: (Score:3)
That makes it pretty much in line with any other use of a bank. Withdraw cash? They won't get involved. Write a check? Once its cashed it's gone. Wire transfer? If they haven't withdrawn the money yet you can get a hold put on it and get it reversed, but only if it hasn't been removed yet. What more are you really expecting them to do?
The nice thing is it doesn't require you to add another app to your phone or attach to your bank account. It's isn't giving your info to a third party or inserting a
Re: (Score:3)
In a nutshell, it's like one step above cryptocurrency when it comes to protection against fraud
The fundamental problem in America is that you leave fraud protection up to the terms of service of a private entity rather than something legally enshrined in your banking laws. This is less of a zelle issue and more of a government issue.
Quickly? (Score:2)
Re: (Score:3)
All my Zelle transactions are processed within a few seconds. I've never experienced a days-long wait.
Re: Quickly? (Score:1)
Are you suggesting his/her experience is atypical or what?
Re: (Score:2)
Yes.
Zelle versus venmo (Score:3)
I was surprised to find that Zelle has higher dollar volume than venmo:
151 million consumer and small business accounts are enrolled to use Zelle, an increase of 16 million from 135 million in 2023. Zelle transactions grew 25% from 2023 to a total of 3.6 billion, exceeding $1 trillion in annual payments volume for the first time.
Re: (Score:1)
It's heavily pushed by the banks. Honestly, for b2b transactions, Zelle is probably a reasonable idea. But since it's run by the banks, Zelle cares about consumers as much as (most) banks care about consumers. Which is "well, I guess we need to work with these tiny pests since the govt comes down on us if we don't."
I somehow suspect that with the new administration, even that small push will vanish. Which surprises exactly nobody.
Re: (Score:3)
Yes indeed, nearly 100 million people in the US use Zelle. It's becoming the default peer-to-peer payment app for people who *don't* use Apple.
https://www.oberlo.com/statist... [oberlo.com]
Re:Popular? (Score:5, Informative)
It's pretty popular in New York for paying street merchants, food carts, etc. For the merchant, it's the convenience of a credit card but without the processing fees. Some buyers might prefer fumbling around with their phone for a while over carrying & forking over cash. And both sides get some reduction in risk and loss from robbery.
I'd certainly be hesitant to use it for any sort of "shipping" transaction (no buyer protections) and for those concerned about privacy, both parties see each other's registered names and emails/phone numbers.
For now anyway ... (Score:5, Interesting)
From TFA:
Change likely prompted by CFPB lawsuit
While Chase didn't share what exactly prompted this decision, the U.S. Consumer Financial Protection Bureau (CFPB) sued Early Warning Services (Zelle's operator) and three of its owner banks (Bank of America, JPMorgan Chase, and Wells Fargo) in December for rushing the service into the market to compete with other payments platforms like Venmo and CashApp and failing to implement adequate consumer safeguards.
According to CFPB's lawsuit, this resulted in hundreds of thousands of Zelle and bank customers losing over $870 million since the payment service was launched.
The affected consumers were also denied assistance and told to contact the scammers to recover their money, while the banks failed to investigate their complaints and provide them with legally required reimbursement for errors and fraud.
The Trump Administration, via Elon Musk and DOGE, is trying to get rid of, or otherwise shutdown, the CFBP. Not sure why, (/s) but may be due to its probable regulation/oversight of X providing financial services/payments (via partnership wVISA). Hmm...
Elon Musk's DOGE takes aim at agency that had plans of regulating X [npr.org]
Vought orders CFPB to stop investigations and suspend new rules from taking effect [pbs.org]
Re:For now anyway ... (Score:4, Interesting)
CFPB is an "agency" which is funded through the Federal Reserve but wields Executive authority
Exactly. CFPB purports to be independent but also exercise executive authority of government, And the US constitution does not allow this, so it is inherently unconstitutional to have an executive agency with access to any of the US government's executive authorities or powers.
Per the constitution: the executive power is exclusively vested in the president. Which means that executive powers can be exercised only under the president's direction and the president can remove any person or people from being delegated executive powers. Any act of congress which purported to expand or constrain the power of any Office as provided by the constitution conflicts with the supreme law of the constitution meaning that it is superceded by the constitution and is invalid.
For example, one of the first laws ever ruled unconstitutional was a section of the Judiciary Act of 1789, which was in the Marbury v. Madison case, Because that law purported to expand the power of the Supreme court to take original jurisdiction in a case where an order of mandamus was sought against the president. The ruling was the applicant had the legal right and the order was the proper remedy, but the supreme court lack the authority to make the remedy.
If congress remains at liberty to give this court appellate jurisdiction, where the constitution has declared their jurisdiction shall be original; and original jurisdiction where the constitution has declared it shall be appellate; the distribution of jurisdiction made in the constitution, is form without substance. Affirmative words are often, in their operation, negative of other objects than those affirmed; and in this case, a negative or exclusive sense must be given to them or they have no operation at all. It cannot be presumed that any clause in the constitution is intended to be without effect; and therefore such construction is inadmissible, unless the words require it.
128 To enable this court then to issue a mandamus, it must be shown to be an exercise of appellate jurisdiction, or to be necessary to enable them to exercise appellate jurisdiction...
162 It is also not entirely unworthy of observation, that in declaring what shall be the supreme law of the land, the constitution itself is first mentioned; and not the laws of the United States generally, but those only which shall be made in pursuance of the constitution, have that rank.
163 Thus, the particular phraseology of the constitution of the United States confirms and strengthens the principle, supposed to be essential to all written constitutions, that a law repugnant to the constitution is void, and that courts, as well as other departments, are bound by that instrument.
164 The rule must be discharged.
Re: (Score:2)
Well, according to Wikipedia independent agencies have existed since at least the 1840s. All branches of government have had plenty of time to deal with them yet they're still around today. In 2024 the Supreme Court said their funding mechanisms were fine. Trump fired and appointed a new director to the CFPB so your claim the President doesn't have control over it seems misguided, but I'm no constitutional lawyer.
Trump isn't trying to reorg it, he's halting it's operations. Operations which were dictate
Re: (Score:2)
Dang, I forgot the link: https://en.wikipedia.org/wiki/... [wikipedia.org]
Re: (Score:2)
Well, according to Wikipedia independent agencies have existed since at least the 1840s. All branches of government have had plenty of time to deal with them yet they're still around today.
In this case time does not mean anything. It is very possible that a past administrations chose to abide by many constraints or decided it more effective for them to work with it even if the implementation is not constitutionally enforceable. After a few presidents go in that direction, then many afterward may follow th
Re: (Score:2)
For most Americans, getting laid off and having to take a lower-paying job is enough to end up having to come face-to-face with the business end of the debt collection industry. The CFPB was created because after the last major recession, a lot of debt collectors weren't following debt collection laws. They could get away with it because, prior to the CFPB, your only realistic recourse when a debt collector did something illegal was to sue them - a potentially expensive and time consuming process.
If you'v
Zelle isn't very useful (Score:4, Informative)
I sell machines for glasswork that I make in my home CNC shop. Some customers pay with zelle. They almost always report problems like confusing and kinda random dollar and time limits.
My wife wasted hours trying to send her daughter money with zelle.
It might be OK for buying lunch, but for anything over $1000, not very good
Re: (Score:2)
I paid a contractor to install a whole-house generator, several thousand dollars, with Zelle. I use it all the time to pay my mowing crew. No issues.
Re: Zelle isn't very useful (Score:1)
So you're suggesting that his/her experience is atypical, or what?
Re: (Score:2)
Correct, I'm suggesting that his/her experience *may be* atypical.
Re: (Score:2)
Zelle VS CC/Paypal (Score:2)
Re: (Score:1)
If the banks are not charging a fee they banks can't give protections needed for commerce such has chargebacks
The banks ARE collecting a fee. You have to deposit money with them to use Zelle, and every deposit increases the bank's reserves, and the bank is allowed to loan out 10x the money you deposited to them. When you deposit $1000 they are lending out $10,000. At 10% or more APR in interest on $10k comes out to about $1000 a year in profit off your 1k deposit.
The fee in this case is your money
Re: (Score:2)
When you deposit $1000 they are lending out $10,000
Not this again. No that is absolutely not true. When you deposit $1000, they lend out roughly $950 or so.
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If the banks are not charging a fee they banks can't give protections needed
Ahhh yes those poor banks who are all offering services without making money. /sarcasm
No sorry you don't need to charge a fee on every single thing you do to offer guarantees on the thing in question. The protections are provided from the general pool known as "revenue" which banks make in many ways. Most other countries have zero issues mandating banks provide fraud protection, even if they don't charge a transaction fee for a debit transfer.
Buyer Beware. (Score:3)
Everyone needs to have their hand held these days in case the bad man makes you look a fool. It sure would be nice if we went back to using our brains and common sense.
Re:Buyer Beware. (Score:4, Interesting)
> A fool and his money. etc...
I can understand the sentiment. But how about protecting the older people who usually have trouble telling fact from fiction as their brains age? I suppose most of us will get there eventually. Should the govt. provide us some protection from scammers or should it be a wild west?
Re: (Score:2)
But how about protecting the older people who usually have trouble telling fact from fiction as their brains age?
Old people are useless. Why don't they die already?
(yes, I am old, that is why I know the sentiment)
Re: (Score:2)
Realistically, as a bank you've gotta assume that if you offer a product for transferring money online, then at least some of your customers are going to use it for online purchases (even though it's not intended for that purpose). It's like how various products have warnings not to use them in ways that you know people are going to do anyway, like sticking q-tips in ears.
I pay in dollars and cents (Score:2)
Someone probably told Chase (Score:2)
Those social media sellers were working from home, and their RTO was automatically amended to include them as well
How does Chase know it's social media (Score:2)
How is Chase going to identify if a Zelle transfer is social media related? I built a fence and split the cost 3-ways with the adjoining neighbors who paid me via Zelle. I've used Zelle to get payment for items I've sold in person to people I know. Most of these people I also have contact via social media.
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How is Chase going to identify if a Zelle transfer is social media related? I built a fence and split the cost 3-ways with the adjoining neighbors who paid me via Zelle. I've used Zelle to get payment for items I've sold in person to people I know. Most of these people I also have contact via social media.
Obviously they can see the transactions on both ends, they'll be looking for a correlation of a receipt of multiple payments with the same amount etc. and then some sort of correlation to a product.
Free payments are nice (Score:2)
I use it to get paid by and to sometimes refund customers. I pay some people for services. Get paid for things I'm selling over Craigslist. Etc. Zelle is useful, quick for small amounts, has no fees, and is widely used.
The downside is the overbearing security my bank puts in for larger transfers, because people are so fucking stupid and get scammed constantly.
Still, a 15 minute phone call to the bank is easier than finding my checkbook, writing a check, getting an envelope, filling out the address, find