Levvel Blog - Zelle for Small Business—A Worthwhile Investment

Zelle for Small Business—A Worthwhile Investment

Zelle for Small Business—A Worthwhile Investment

How are Banks Thinking About Zelle?

Over 200 banks are now participating in the Zelle Network, and 85% of the participating banks are small banks or credit unions (1). Participating banks, both big and small, are not directly profiting from their retail bank’s Zelle offering. Instead, the product drives customer satisfaction, increases loyalty, and provides banks with an additional data stream on their customers. Banks offer Zelle to their individual consumers similarly to other free digital banking products, like bill pay and mobile check deposit, to stay competitive and relevant in the industry. Notably, Zelle’s largest competitor, Venmo (owned by PayPal), has not been profitable up to this point.

Is Zelle Available for Small Business Bank Accounts?

Early Warning, the company that owns the Zelle Network and is owned by the largest U.S. banks, published operating rules in October 2018 to allow a new customer segment to use their Zelle services. Based on user data and interest from the member banks, Early Warning saw the need to expand Zelle services from the existing person-to-person (P2P) payments platform to include small businesses. Now, the rules allow small businesses to link their business bank account(s) to an email address or mobile phone number and they can send, request and receive money. The service lets small businesses transact with other small businesses (B2B) and supports payments between consumers and small businesses (B2C and C2B). Banks that have previously implemented Zelle for P2P can more easily implement Zelle for Small Business and many financial institutions are already working towards a solution. On the contrary, Early Warning’s Zelle app, built for users whose bank does not offer Zelle, does not support small business users.

Can Banks Monetize Their Zelle for Small Business Product?

There is good news for banks looking to bolster their bottom line—there’s finally a way for financial institutions to monetize their Zelle offering! Small businesses typically have higher expectations and more complex needs than the average consumer, and thus are more willing to pay fees for faster money movement. There aren’t any restrictions or guidelines from Early Warning to decide what fees should be charged for the offering and the fees will vary by financial institution. Some financial institutions charge their small business clients a fixed fee per payment while others have bundle pricing for their payment processing services.

Why Would Small Businesses Pay for Zelle Services?

Small businesses tend to have less stable and more variable income, and they need improved cash flow and predictability on payments. The real-time money movement that Zelle offers helps these companies gain more control over their finances. These institutions can use Zelle to pay their bills, make healthcare payments to their employees, pay contractors, or even use the product for invoicing. With Zelle, there is no need to worry about insufficient funds or unauthorized payment issues that typically arise from standard ACH payments.

You can also think of Zelle as a replacement of more traditional forms of payment, including cash, checks or cards. According to Intuit, 55% of small businesses in the U.S. do not accept card payments (2)—Zelle offers a flexible alternative. When small businesses, who do not accept cards, have clients that don’t have a checkbook or cash handy, the small business can easily request and receive the amount required via Zelle.

Small businesses can even stop writing elusive checks and living with the uncertainty of not knowing when their recipients are going to cash out. With faster payments, companies will no longer worry about inflated balances, like they do with checks. With faster payments, small businesses will no longer worry about inflated balances, like they do with checks.

What Do Banks Need to Consider When Implementing Zelle for Small Business?

There are additional factors financial institutions need to consider when implementing their Zelle for Small Business solution. Small business owners commonly have additional managers of their business accounts, commonly referred to as subusers. If applicable, the bank will need to decide if they want to allow subusers to use their Zelle for Small Business Service. If the bank is supporting subusers, they will need to consider whether the subusers are allowed to register a new email address or mobile phone number that is linked to the small business account, in addition to other permissions. The financial institution will need to determine how enrollment will work, including whether the subusers are required to enroll in the Zelle for Small Business Service separately from the account owner. Additionally, some small business owners will have their personal and small business bank account(s) at the same bank, and the bank will need to keep those valuable customers in mind when designing their user experience because those customers may be eligible for more than one Zelle service.

Can Large Businesses Send and Receive Money with Zelle?

Larger U.S. banks have been using Zelle as a method of digital disbursements for their corporate and government clients for a while now. When you think of digital disbursement use cases, think of large businesses who write mass quantities of checks, e.g., insurance claims, tax refunds, account refunds, overpayments, check replacement and jury duty.

The average cost for a corporate to write a paper check is $5.91 (3). When you multiply that cost by the number of checks sent, there is a huge opportunity to save money, increase efficiencies and reduce risk. Not only are checks expensive, but the corporates are accepting the risk of their checks getting lost or stolen. With Zelle, the sending business only needs to know the recipient’s email address or phone number to send a payment. No need to collect the recipient’s sensitive account information or take on the risk of storing that information in a database.

Zelle is a win-win for banks and businesses alike. Learn more about P2P payments and Zelle with Levvel’s recent P2P Payments webinar. You can also learn about real-time payments with Levvel’s new RTP vlog series. To see if your bank is ready for real-time payments, read Levvel’s 2020 readiness report and implementation considerations checklist.


  1. https://www.zellepay.com/press-releases/zelle-ends-2018-its-strongest-quarter-record
  2. https://quickbooks.intuit.com/r/getting-paid/cost-benefit-analysis-of-accepting-credit-cards-for-your-small-business/
  3. https://acom.com/cost-issuing-checks/
Mary Meade

Mary Meade

Payments Consultant

Mary Meade is a Payments Consultant at Levvel, where she works with Fortune 500 companies on strategy and execution engagements. Before working at Levvel, she spent 6 years at Bank of America working on payments business and software development teams. While at Bank of America, she led the launch of Zelle. She has a B.S. in Engineering from Virginia Tech and is a self-proclaimed payments geek. Mary resides in Charlotte, NC with her husband, two boys and French bulldog.

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