Mobile Payment App Reviews From A To Zelle

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When was the last time you wrote a check to a friend?

In 2018, this seems like an outdated concept, since online peer-to-peer payment platforms make personal money transfers easy, quick, and secure. Services like Square Cash, Zelle, Venmo, and Paypal are changing the way that we pay, but each platform offers markedly different features.

Drawing of card swipe attachments for Square and PayPal
Morning Brew on Unsplash

If you’re still writing checks, or—gulptrading cash, you might feel overwhelmed when considering your options. Here’s what you need to know before paying your friend Zack for your share of the pizza.

One of the first massively popular platforms, Paypal is still an impressive force.

It was originally built to facilitate safe payments on eBay, but in 2015, Paypal Holdings officially split off from eBay Inc., and immediately posted a $49.5 billion market value, leapfrogging tech giants like Netflix, Twitter, and eBay (awkward).

Paypal allows users to link their bank accounts and credit cards, then instantly transfer funds to vendors and other Paypal users. Use the service to send money to friends or family, and you won’t pay a fee under most circumstances, provided that you’re using your bank account or Paypal balance. The service assesses a 2.0 percent fee and a standard $0.30 charge, however, for sending money via a debit card or credit card.

Over time, Paypal has become strongly associated with online shopping, and while it has some powerful features, it can be cumbersome for person-to-person transfers. Users have to manually withdraw money to their bank accounts, and while Paypal has a mobile app, it’s not specifically geared towards peer-to-peer users.

In 2009, Venmo, a (mostly) free service designed for sending small amounts of money, began beta testing.

In 2012, the app launched to the public and was acquired later in the year by Braintree, a payments company, for $26.2 million. About a year later, Paypal acquired Braintree for $800 million, turning Venmo from low-key competitor to collaborator.

Now fairly common in Americans’ pockets, Venmo provides a more streamlined experience than Paypal—with added social features.

Who would want social networking in a payment app? Quite a few people, as it turns out. Venmo reported staggering growth through its first few years, processing an incredible $9 billion in payments in the third quarter of 2017, according to The Daily Dot. For comparison, in 2015, the company processed $1.3 billion in its first quarter.

The app’s activity feed might be responsible for a large amount of that growth. The feature allows users to see their friends’ payments and notes—without actual numbers, since that could be a serious security issue.

Greyed out hand holding phone with Venmo screen up, and
Morning Brew on Unsplash

Still, send your friend Tim a few dollars with a note that says, “for brain surgery,” and your friends will see the note. Users can change their default settings to make all payment records private (there’s a quick explanation of that process on Venmo’s website here), but many seem to enjoy the app’s social interactions.

“If you can see how your friends are spending money, you can learn a lot about them,” says Maria, a 30-year-old Venmo user in St. Louis. “It’s more focused than other social networks, and that’s why I find it entertaining.”

“[Venmo is] addressing the taboo associated with money matters,” says Jennifer McDermott, consumer advocate at “They’ve made transferring and requesting cash an open and fun experience.”

The social features also give Venmo a practical advantage. Say you’re out with three friends and you decide to order a pizza. If you’re all on Venmo, you can easily find your friends’ accounts, split the bill, and pay your share with a few quick taps. On Paypal, you’d have to know your friends’ usernames or email addresses, and you couldn’t commemorate your purchase with a witty note (“Tim eats his pizza with a fork and knife”).

Still, the social features aren’t a selling point for every user.

“I hate the idea of showing people what I’m paying for, even if it’s not specific,” says Brian, a 36-year-old Chicagoan. “Why give someone that sort of access? It’s just asking for trouble.”

Square Cash, a competitor of Venmo, ditches the social media features in favor of privacy and speed.

Square Cash is arguably more streamlined than Venmo. Users simply enter an amount of money, type in the recipient’s phone number (or $Cashtag, which is typically just a person’s name), and hit send. Depending on their account settings, the funds can be added to a running balance or automatically deposited in the recipient’s bank account.

The service also offers Instant Deposit, which works exactly as you’d expect: Funds deposited into a bank account appear within minutes.

“Immediacy has been a big selling point of Square Cash,” says McDermott. “Users can automatically transfer the funds they receive into their bank accounts, unlike with Venmo, where the money sits in an account until the user initiates a transfer, at which point it takes 1–3 business days to appear.”

Square’s Instant Deposit feature is optional, and it’s not free. The service charges a modest 1 percent fee on the deposited amount. Users can avoid some of the fees by referring their friends to the app.

Recently, Square Cash announced support for Bitcoin, potentially widening their brand’s appeal to users with privacy concerns. While Bitcoin stores records of all transactions, Bitcoin addresses don’t have assigned names, so tracing payments is difficult (but not impossible, especially when processing transactions through a third-party service like Square Cash).

Zelle is a relatively new payment platform backed by more than 30 major banks.

Bank of America, Wells Fargo, Citibank, JPMorgan Chase, and various other major financial institutions support Zelle (the name comes from “gazelle,” a fast animal that, oddly enough, rarely performs small cash transactions). Most users can transfer funds instantly without paying an additional fee.

Zelle has its own app, but it’s also available as a built-in feature in many existing banking apps. On its website, Zelle also touts its security features, though both Venmo and Square Cash use similar encryption technologies to protect their users. Square Cash, Venmo, and Paypal meet Level 1 PCI Data Security Standards (we won’t get into what that means, but if you’re interested, you can read more here).

While we couldn’t find info on Zelle’s compliance, their website notes that service uses “authentication and monitoring features” to keep accounts secure. We’re guessing that they’re PCI compliant as well, since compliance is, well, mandatory. That’s why it’s called “security compliance” instead of “beautiful security wishes.”

“As someone that uses both Venmo and Zelle, I can tell you that I feel completely secure using Venmo,” Michael Brown, research analyst at LendEDU, tells Urbo. “I really like Zelle because it can deposit money into your bank account instantaneously, but I … rarely withdraw my money from my Venmo account. I like having a running Venmo balance that I can just use all the time instead of having to worry about withdrawals and the sort.”

In a survey of 500 Venmo users, LendEDU found that 93.9 percent of respondents hadn’t heard of Zelle. More than half of those users said that they wouldn’t consider switching from Venmo to Zelle. Still, with backing from major banks, Zelle could eventually challenge Venmo’s dominance in the peer-to-peer payment market.

Regardless of which service you use, the benefits of fast, secure payments are hard to miss.

If you’re a business owner, however, apps like Venmo and Square Cash have limited functionality.

“I think for small business, the platforms have limited use because, although they don’t charge account fees like banks, they do not offer any protection against bankruptcy of the site,” says Anna Knezevic, managing director of financial firm M&A Solutions, Ltd. “The transfers are more convenient and automated, but they are typically more expensive, relative to the [costs of a] normal bank account. For low volumes and high amounts, it is frequently preferable to use other means for payment.”

“Overall, I think these platforms have a long way to evolve,” she notes.

“With over 70 percent of our customers using their mobile phones to shop, entering in a username and password for Paypal is much easier than filling out all your information through a normal checkout page,” says Jeff Moriarty, owner of Moriarty’s Gem Art. The business handles about $600,000 per year in transactions through Paypal. “It’s much quicker for the customer.”

Peer-to-peer payment apps have fairly strict transfer limits, which makes sense; they’re designed for small transactions, so while you’d use Venmo to buy a pizza, you wouldn’t use it to buy a pizza oven. Venmo users begin with a $299.99 weekly rolling limit, while Square Cash has a $250 per-week sending limit. Both services allow users to extend their limits by verifying their identities.

So, which app should you use? There’s no simple answer, as the platforms’ features overlap considerably. If you’re intrigued by the voyeuristic allure of Venmo’s activity feed, it’s the clear winner. The service is also incredibly popular; ask a friend to “Venmo” you some money, and they’ll probably know what you’re talking about. Ask them to “Zelle” you the rent, and they’ll assume that you’re going insane.

If you need to instantly transfer money, Square Cash and Zelle offer clear advantages, and if you’re interested in Bitcoin, Square Cash is currently your only option. Just make up your mind quickly; we really, really need to pay for this pizza.

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