Look out, Zelle — PayPal is also touting a new instant bank transfer feature
PayPal's new instant transfer feature is a clear attempt to stay competitive with Zelle, a rival service that's only been around for a few weeks.
By Lulu Chang
PayPal is punching back. Now that it’s been thrown in the ring with newcomer Zelle, the big banks’ answer to payment processing platforms like PayPal itself and its Venmo subsidiary, the Palo Alto-based company has debuted instant bank transfers. This ought to make the payment processor competitive with Zelle in one of the key areas where the newcomer appears to have some leverage.
While PayPal has been around for nearly 2o years at this point, and Zelle is still in its nascent stages (it just starting rolling out to users in June), it clearly isn’t taking any chances when it comes to maintaining its dominance of the space. And part of its strategy appears to be doing everything its competitors can, though for now, it will be for a fee. PayPal users will soon be able to send funds from their accounts to their banks in just a few minutes, which is a major upgrade from the 24 hours or so it currently takes to make this kind of transfer. But there’s a catch — it’ll cost you 25 cents per transaction.
Sure, it’s a nominal fee, but it’s not one that Zelle charges. That said, Zelle also doesn’t have a dedicated app yet, nor does it boast many of the social features that have made PayPal and Venmo so popular among users. Still, Zelle’s backing from established banks like Chase, Citibank, and Bank of America, along with its instant withdrawals functionality, could certainly make it an attractive alternative.
The new instant withdrawals feature is currently in beta testing, and has been made “available to select PayPal users and will be made available to all U.S. PayPal users with eligible Visa or Mastercard debit cards over the coming weeks and months,” the company said in a blog post announcement. So the next time you send money through PayPal on Slack or some other social media channel, you should be able to move that money to your bank account almost immediately.
So watch out, Zelle. The competition is definitely on, and from what we can tell thus far, it looks like it’ll be a fierce one.
This article was originally posted on Digital Trends