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Comparison Between PayPal, Venmo, and Zelle

Updated on October 02, 2020 11:04 am
P2P money transfer

The peer-to-peer (P2P) payment market is expected to reach $396.48 billion in 2020 according to eMarketer's latest estimates. The P2P payment services essentially allow customers to link their bank accounts to a P2P payment application to send and receive money electronically between two users, even if they use different banks. The transactions can happen via mobile devices or computers with an internet connection. There are a variety of P2P payment apps that can be downloaded and installed on mobile. After the initial set-up, there is no need for account details to transfer money. Instead, an email or phone number linked with the bank account is only needed to make the payments.

Peer-to-peer payment (P2P) is expected to reach 126 million users in 2020. The surge in users will also be boosted by the coronavirus pandemic as it provides easy money transfer services without any physical contact. In the United States alone, there are over 20 mobile payment apps. PayPal, Venmo, Square Cash, and Zelle are some of the top peer-to-peer payment apps.

P2P money transfer

Although P2P payment apps can have similarities, they do differ in the services they offer, the fee structures, transfer limits, or the access of money.

Let's see in what ways PayPal, Venmo, and Zelle differ from each other


PayPal, an online payment service was established way back in 1998 as "Confinity" which was later acquired by eBay in 2002. But it spun off from eBay in 2015. It acquired a digital money transfer company, Xoom Corporation in 2015, gaining access to Xoom's millions of active users.

PayPal launched its mobile peer-to-peer payment platform called in September 2015 which enables users to create a personalized PayPal link that can be sent via text, email, or social media platforms to peers for fast transactions. was launched to facilitate cross-border transactions.

Venmo, a mobile payment app is a subsidiary of PayPal. Venmo was founded in 2009 by Andrew Kortina and Iqram Magdon-Ismail as a means to transfer money quickly to one another. Braintree bought Venmo in 2012 and PayPal acquired Braintree in 2013. That's how Venmo's service is owned by PayPal. It acts as a digital wallet and allows customers to send and receive money through a linked bank account, Venmo balance, or credit card. However, it is only available in the U.S. Zelle is a bank-backed mobile P2P payment app launched in 2017. It is owned by seven major U.S. banks namely Bank of America, JP Morgan Chase, Wells Fargo, Capital One, US Bank, BB&T, and PNC Bank. The P2P payment service is offered by several banks in the U.S. as an additional service to account holders. Like Venmo, it caters to U.S. customers only. People can send money to friends and family who are also Zelle users via their bank account or the Zelle app using the registered email or phone number.

Popularity and Number of Users

PayPal is considered the first P2P payment service, the most popular payment method on eBay, and with online merchants and buyers. Users need to create a PayPal account (website or app) and get it linked to their bank account or pay with their credit or debit cards. PayPal now has garnered 305 million active users by the end of 2019.

Venmo is a popular payment app among the millennial population, partly due to its interactive social media-like feed. Venmo accounts can also be used to purchase things online from approved merchants. Venmo is very convenient for splitting bills or rent and other utilities but for the instant transfer to work, the users must be Venmo users. PayPal revealed that Venmo has 40 million users.

Zelle's partnership with more than 500 U.S. financial institutions is bound to make more customers Zelle users by default. While Venmo is effortlessly adopted by the millennial population, Zelle is targeting the boomers and the Gen Xers. Its service comes already integrated into the participating bank's app or can be downloaded as a standalone app. The money is transferred from one bank account to another in an instant through Zelle. The number of users has reached 27.4 million users.


PaypPal charges a fee of 2.9 percent plus USD 0.30 for P2P payment using debit/ credit card. Transfer via bank account is free (ACH).

Venmo charges 3 percent for P2P using credit cards and free for debit/prepaid / bank account. Their free standard transfer may take 1-3 business days.

Zelle has no charge for the P2P payment service. It is better to check with your bank or credit union to confirm if there is a fee for the service.

Transfer Limits

With verification, PayPal has no transfer limit. It may be limited to $10,000 in a single transaction. Venmo P2P sending limit is $299.99 for an unverified account. With verification, the weekly limit is $4999.99. Zelle transfer limit varies with banks.


All the P2P payment service uses data encryption to protect customers, monitor fraud, and check unauthorized transactions and have secure users' data storage capabilities. Zelle is a bank-backed application so users feel safe with their money and information. Venmo and PayPal are just as secure. Venmo even provides a PIN to your phone for added security. However, the problem with instant transfers like Venmo and Zelle is that it cannot be undone. Make sure that the money is sent to friends and family that you trust.

International Money Transfer

PaypPal is one of the few P2P money transfer platforms that allow international money transfer. Xoom, a PayPal company is an online money transfer platform that offers the best exchange rate and speed of transfer, usually within a few minutes. And if you are paying using your PayPal balance, you can send money at $0 fees.

Venmo does not provide international money transfer yet. Here are some alternatives to Venmo for international money transfers

Zelle does not provide international money transfer yet. Here are alternatives to Zelle for international money transfers.

PayPal vs Venmo Vs Zelle

PayPal is present in 203 countries and available in 26 currencies. It is a global online payment system, while Venmo and Zelle are to send money online within the U.S. and cannot do international transfers.

For business payments, PayPal is very convenient. Many online retailers are PayPal users.

Venmo only partners with a small number of authorized merchants. It does not work with businesses as a standard. Small businesses having savings or checking accounts may use Zelle service for business. But only some banks may offer it for business use. Mostly are for personal use. There might be fees incurred for business accounts.

One appealing feature for Venmo is that users can send messages, comment on transactions with emojis when they make a payment. Partly digital wallet and partly a social media, it is hit with the young generation. Unlike Venmo, Zelle is not a digital wallet. You can only transfer money from one account to another. Zelle comes embedded into the banking app of the participating banks and can send money at zero cost instantly. Only email and phone numbers are needed to get enrolled with the app.

Each mobile payment has its advantages and disadvantages. It will come down to what service you are looking for. Many do use more than one mobile payment apps when it comes to sending money digitally as there are many options.

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