Zelle has been herald by the banks as the way to digitally send money between users with different banks. In theory it works alright, you need the person’s email or phone number to send money, easy peasy right? Well it sounds great in theory but it seems Zelle has it’s issues.
Now when any mainstream user thinks of a way to try and argue Bitcoin they talk about how it can be hacked (the system can’t but a users wallet sure can). The banks are seemingly have a bit more trouble than even crypto with their system. Zelle seems to have different settings between different banks, some send notifications and require extra authentication while others don’t. Some banks are reporting a 90% fraud rate with Zelle, 90% and the issue is this wipes out the entire bank account. This is definitely some scary stuff, were talking about with one login stolen phone and a remember on the app the entire bank account and savings is wiped.
Now we come to the real issues with Zelle their receival system sounds great just a phone number is what do but guess humans are bad. Phone numbers are reused and people don’t update their records, you may think you’re sending $500 to your friend but low and behold the person who previously had their number never changed it on their bank accounts and they received $500. There is no reversal and the bank can’t do much.
We also come to the vulnerable, in crypto we know we aren’t getting certain users and that’s okay but banks have set up most of their users with online accounts like it or not. An elderly couple may not even know their login but if someone can get into it they can use Zelle without the original user needing to sign up wiping their entire retirement.
Zelle is a weakness of the banks refusal to go with crypto and it shows their reluctancy will definitely lead to losses. We will one day get a bank including a Bitcoin mobile wallet in their app and allowing instant exchange and sending, this will be the future, not Zelle.