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Zelle vs. Cash App vs. Venmo—What’s the Difference?

Chris Gottschalk

Chris Gottschalk About The Author

Oct 8, 2020 5:45:00 AM

Peer-to-peer payments are quickly becoming the new normal. People are using them to do everything from sending birthday money to paying your buddy for your share of the bar tab.

If you want to send and receive money, you’ll need to download a payment app to do so. Currently, the three most popular payment apps are:

  • Cash App
  • Venmo
  • Zelle

All these apps are designed to do the same thing—transfer funds from one person to another person. All three services are available for free, although some services do assess fees when you transfer funds to your account, and all three provide smartphone apps you can use.

Despite being so similar, though, there are some key differences you’ll want to consider.Schedule a Call

Venmo is More Social

Man with Payment App  | First Alliance Credit UnionVenmo has a social media aspect to it that the other payment apps do not. When you sign up for Venmo, you can sync up your account with your smartphone contacts and even your Facebook friends. That means your friends can see who you're paying and who's paying you. Also, since every transaction has an area in which to write memos, your friends can also see why you're paying someone or getting paid.

While this can be a lot of fun between groups of friends, it does have its downside. You may not be comfortable with your the general public knowing who you paid and who you want to pay you. While you can opt out of this feature, you might want to consider Zelle or Cash App if you’re really worried about your financial privacy. 

Cash App and Venmo Offer a Physical Cash Card

If you want the benefits of a P2P app but still want the security of a debit card, Cash App and Venmo have their own debit cards. These cards connect to your Cash App or Venmo balance instead of your checking account, and you can use them the same way you would use a financial institution’s debit card.

You should keep in mind, however, that since these cards withdraw funds from your Cash App or Venmo account, you’ll want to be very sure you have enough money in your payment app account to cover the charges you accrue. Otherwise you'll have to pay any declined transaction and overdraft fees.

Zelle Puts Money in Your Account Instantly

While both Venmo and Cash App let you keep a balance in your account with them, Zelle does not. This is because any funds you receive from Zelle are directly transferred to and from your banking account.

This is actually a better setup than Venmo and Cash App. Both payment apps charge money if you want to immediately transfer the money in either of those accounts into a checking account at a financial institution. Otherwise you have to wait a day or two.

Its also important to point out that putting money into a Venmo or Cash App account removes the opportunity to earn interest on your money. Since Zelle utilizes a direct connection to your existing banking accounts you can keep your money in your banking account longer and take advantage of compounding interest

You can use Zelle Without the App (Maybe)

Woman and smartphone | First Alliance Credit UnionWhile you can download Zelle as a stand-alone app, if your credit union or bank offers Zelle as a service you can use Zelle by logging into online banking or potentially even using your financial institution’s mobile app. (It’s worth pointing out First Alliance Credit Union lets you use Zelle in both these ways!)

All Three are Safe

Perhaps one of the biggest concerns about using electronic payments is the safety issue. Which one is the safest? According to Consumer Reports, all three services are safe enough to use. However, you need to be diligent when using all three.

Scammers are well aware of this technology, and they have developed several tactics to trick you into sending them money through payment apps. Unfortunately, there’s no guarantee you’ll be able to get back any money you might have lost to a scammer, so you need to be aware of who you’re paying through a payment app.

Try Zelle for Free at First Alliance Credit Union

As you can see, while all these payment apps are meant to do the same thing, they also have some significant differences between them. Which one you choose will depend a lot on your personal preferences, such as whether you’re comfortable sharing who you’ve paid, whether you want to have another debit card and whether you’re okay waiting a couple of days to have your payments transferred to your checking account.

If you’re not sure which payment app is for you, you can use Zelle for free when you become a member at First Alliance Credit Union today. This service is available for all members, and you can access it when you sign up for online banking or use our mobile app. It’s easy to learn, convenient, and the money will typically show up in the recipient’s account in minutes.

Learn More About Zelle