Zelle for business: can a small seller take Zelle payments?

Can a small business use Zelle?

Yes, with a condition. Zelle runs inside banking apps, and Zelle's FAQ says your bank or credit union must offer Zelle for your business account type. It adds that not all banks and credit unions that offer Zelle to consumers offer it to small businesses. The first step is to ask your bank.

Once your bank allows it, customers pay you with a business email address, U.S. mobile number or Zelle tag. Zelle says both parties need an eligible checking or savings account, and that Zelle is in over 2,400 banking and credit union apps. The money goes to your business account, typically within minutes.

Which banks offer Zelle for small business accounts

Each bank decides whether its business accounts can use Zelle, so the answer for your account is on your bank's own Zelle pages. Three US banks state their business terms in public, and the table sets them side by side as each bank words them.

The pattern is the same at all three. The bank does not charge a Zelle fee, but the business checking account may carry its own fees, and send limits are set by the bank. Because not all banks and credit unions that offer Zelle to consumers offer it to small businesses, check with your bank before you print a Zelle tag on an invoice.

Receiving is usually the side that matters to a seller. Wells Fargo, for example, says it does not limit how much money you can receive, but the customer paying you is still held to their own bank's send limit. A large order may need to be split over two days or paid another way.

How to set up Zelle for a small business

1. Open or check a business account

   Zelle uses your existing account. Ask your bank whether it offers Zelle for your business account type, because not all banks and credit unions that offer Zelle to consumers offer it to small businesses.

2. Read the bank's terms

   Zelle says the fee for a business account depends on your bank or credit union. Your bank's terms also set your send and receive limits.

3. Enroll in the banking app

   Enroll through the banking app, with an email address, U.S. mobile number or Zelle tag. Use a business email or number so payments do not mix with personal ones.

4. Tell customers how to pay

   Give customers the email, number or tag on your invoice or checkout page. Payment requests can only be sent to enrolled Zelle users, and both parties need an eligible checking or savings account, so a customer without Zelle has to enroll through their own bank first.

Zelle business fees

Zelle does not publish one fee for business accounts. For consumers, Zelle says there are typically no fees for consumers to send or receive money. For business accounts, Zelle says the fee depends on your bank or credit union.

At the three banks in the table, the Zelle transfer itself is free: Chase charges no additional fee for Zelle transactions, Bank of America charges no fee to send or receive in its mobile app or Online Banking, and Wells Fargo charges no fee to send or receive money with Zelle. The cost sits in the business account instead. Wells Fargo, for example, says account fees such as monthly service, overdraft and Business Account Analysis fees may apply.

Card processors work the other way: they publish a rate per sale, such as 2.9% + 30¢ for Stripe online card payments, 3.3% + 30¢ for online and invoice card payments on Square's Free plan, or 3.49% + $0.49 per transaction for PayPal Checkout. A Zelle transfer at these banks costs nothing per sale beyond your account fees. What the card fee buys the buyer is protection: Wells Fargo notes that with Zelle you do not have the same protections as a credit or debit card transaction.

No purchase protection and no chargebacks

A Zelle payment works like handing over cash. Zelle's small business FAQ gives consumers this advice: make sure you are satisfied with the item or service before you pay, because a payment to someone already enrolled with Zelle cannot be cancelled. Bank of America states that neither Bank of America nor Zelle offers purchase protection for Zelle payments, and adds that once you send the money, you are unlikely to get it back.

Wells Fargo gives the same answer: neither Wells Fargo nor Zelle offers purchase protection, for example if the item never arrives or is not as described. It also says once a payment has been sent, it cannot be reversed. Protection does cover one case: Wells Fargo says customers are protected if an unauthorized user accesses their accounts and sends payments. A buyer who paid for an item that never arrived is not that case.

For a seller this cuts both ways. A buyer cannot cancel a Zelle payment the way a card charge can be disputed. But buyers who have read these warnings may not want to pay a business they have never dealt with by Zelle.

Zelle and taxes

Zelle does not report transactions on the Zelle Network to the IRS. Zelle also says the 1099-K reporting law does not apply to the Zelle Network.

That does not make the income tax free. Zelle's FAQ is direct: the business reports taxable Zelle payments to the IRS itself. The IRS says the same in its own words: whether or not you receive a Form 1099-K, you must still report any income on your tax return. Keep your own record of each sale. Tax rules also vary by state, and this page is general information, not tax advice.

When Zelle fits a small seller and when it does not

Zelle suits sales where the buyer already knows and trusts you. It suits online sales to strangers less well.

If you sell online, you can offer Zelle next to a card checkout rather than instead of it. Repeat customers who trust you can pay by Zelle, and new customers keep the card option.

• Fits: repeat local customers, invoices for services, and deposits from people you have met. Chase says the businesses that fit Zelle are those that typically receive payment by cash and check.
• Fits less: an online store selling to strangers, where buyers want a card checkout and a way to dispute a charge.
• Does not work: buyers outside the US. Wells Fargo says Zelle can send money to almost any person or small business with an eligible U.S.-based bank account.

Where Nation fits

Questions about Zelle for business