Author: Shiloh Hills
Zelle is a peer-to-peer (P2P) payment platform that lets users send money to friends and family, split bills, and pay for stuff. What distinguishes Zelle from other p2p is the function to send money to people using their email addresses or phone numbers, and it will be deposited directly into their bank account. The company collaborates with numerous banks so that users can access Zelle directly from their banking app while making the transfer of money easy.
No doubt, Zelle makes it simple to send money but with these new updates, they hope to make it even simpler and safer.
Here are some of Zelle’s latest updates:
Tax Update
The Internal Revenue Service (IRS) issued a law earlier this year that requires payment platforms to report any payment for goods and services exceeding $600. This update, however, does not apply to Zelle. Users with business profiles can receive payments for goods and services without being issued a form 1099-K – the form used to report payments to the IRS.
Users can continue to send and receive money via Zelle for over $600 without incurring any fees. Zelle advises its users to report any taxable payments on their own because it is their responsibility, not Zelle’s.
ClearXchange Shutdown
ClearXchange, a payment platform, started its operations in 2011 with banks such as Wells Fargo, Bank of America, and JPMorgan Chase. It provided payment services like peer-to-peer (P2P), business-to-consumer (B2C), and government-to-consumer (G2C). However, Early Warning Services purchased the platform in 2016 and launched Zelle for P2P services while using ClearXchange for B2C and G2C services.
Unfortunately, they recently announced that ClearXchange will be shutting down on the 30th of June, 2022. Moving forward, existing users must deactivate their accounts and enroll in Zelle to continue receiving payments.
How to Close Your ClearXchange Account and Join Zelle
Step 1: Access your ClearXchange account and deactivate it.
Step 2: After deactivating, download the Zelle app and sign up with your U. S. mobile number and a credit card linked to your U. S. checking account.
Step 3: After signing in, you can register your email address to begin receiving money via email.
Risk Insights
Risk Insight for Zelle protects customers and financial institutions from losses caused by fraud and scams. It also allows financial institutions to validate transaction information.
How it works:
- Users send money using Zelle.
- The financial institution evaluates information about the receiving token in the transaction.
- If there are any red flags, the sender’s institution notifies them and gives them the option to cancel or confirm the transaction.
Conclusion
Zelle enables users to send and receive money quickly, securely, and easily. Additionally, sending money on Zelle is free for all users. With the new Zelle updates, users will be able to send and receive large sums of money from friends and family, as well as pay for goods and services without being concerned about the new tax laws and potential fraud. Nevertheless, ensure you send money to people you know and trust when transacting via Zelle.