Venmo is getting instant bank transfers to compete with Zelle
Venmo bank transfers are getting faster: PayPal announced that users will soon be able to send funds from their Venmo accounts to their banks in minutes for an extra 25 cents per transaction, as opposed to the day or so it currently takes to transfer funds.
PayPal seems to be reacting to Zelle, a new payments processing service backed by major banks like Chase, Citibank, Bank of America, TD Bank, and Wells Fargo that began rolling out earlier in June. While Zelle lacks a dedicated app (for now) and Venmo’s social features, it stood out for allowing instant withdrawals, unlike most other money sharing apps.
According to PayPal, the instant transfer feature is already in beta for select Venmo users, and will roll out to everyone with eligible Visa or Mastercard debit cards in the coming months. Users will be able to choose between the regular, day-long wait or the instant transfer, which will make money available “in a matter of minutes.” (Although PayPal notes that, in some cases, it could take up to half an hour.) The quicker speed does come at a cost, though, but you can argue that 25 cents might be worth getting rent cashed out as soon as possible, or for cashing out on a Friday afternoon.
Venmo’s new instant transfer feature should allow some parity when it comes to speed, although Zelle still has it beat when it comes to cost.