Can You Pay With Zelle Abroad in a Foreign Currency?

The fin-tech boom that began in the last decade has revolutionised the way we send and receive money by utilising P2P (peer to peer) payment technology. In this post, we are going to take a look at Zelle and examine who they are and what they do. We will also test out whether it’s possible to make an international Zelle payment, and whether using Zelle to send money abroad is an effective way to pay for travel expenses.

By the end of this post, you will hopefully know all about Zelle international payments and the logistics of using Zelle to transfer money abroad.

What is Zelle and Why Should We Care?

Zelle logo

Zelle is a US based digital payment network that is ultimately owned and patronised by banking behemoths Bank of America, BB&T, Capital One, PNC Bank, J P Morgan Chase, U.S. Bank and Wells Fargo. It operates via an easy to use app interface that facilitates P2P payments – in order to use Zelle, users simply have to install the app, register and attach it to their bank account. After that they can start sending and receiving payments quickly and easily, using the Zelle network.

The purpose of Zelle is that it speeds up bank transfers between regular people (AKA peers). For example, if you cover the bill in a restaurant using your credit card, and then ask your friends to reimburse you, they can pay you instantly, using just your phone number or email address as long as you both have Zelle.  For Zelle to work, both parties to the transfer do need to have it but as Zelle is attracting an estimated 50,000 new users per day, it may only be a matter of time before it is as established and commonplace as Paypal. Using Zelle is a lot easier and faster than having to manually set up a bank transfer so its widespread appeal is very obvious.

Note that the Zelle technology simply acts as a mediator between banks. In the example I gave above, when your friend pays you, the money leaves his bank account and makes its way to your bank account via Zelle. It is not possible to hold a Zelle balance or use it in of itself as a bank account like you can with Revolut or Wise.

Using Zelle to Transfer Money Abroad

At this time you cannot transfer money abroad with Zelle. In order to send money via Zelle, the recipient needs to have a US bank account.

As such it is not really possible to make an international Zelle payment and using Zelle to send money abroad is not currently supported. You can use Zelle when you are outside of the US (for example if you go on holiday with friends) and you can use it to send money to expats who now live overseas, but only to a US based bank account. As such, the money never leaves the US and so does not qualify as an international payment.

This may come as a surprise to some Americans who are so accustomed to using Zelle and what may come as a bigger surprise is how expensive some other international money transfer options are. Thankfully though, the same fin-tech spirit that spawned Zelle has also created some excellent money transfer start ups too as we shall now see.

Alternatives To Using Zelle to Send Money Abroad

Whilst Zelle cannot currently be used to send money abroad, there are still other great P2P platforms out there. For example, Wise (formerly known as Transferwise) allows users to make international payments to over 160 countries instantly and with very competitive fees. Wise also allows users to hold a foreign currency balance and even comes with a debit card which can be used for zero-fee card payments anywhere in the world, and zero-fee ATM withdrawals up to the value of $200 per month.

Applying for a Wise account is quick and easy and users can usually obtain an account within a few minutes. Of course, the crucial distinction between Wise and Zelle is that anybody (in the US) with an existing bank account can start using Zelle instantly and so Wise and Zelle are not direct competitors.

Will There Be Zelle International Payments in the Future?

All of the major banks that back Zelle allow account folders to make and receive international payments using the SWIFT and IBAN networks. In order for Zelle to work for international payments, it would require a substantial tweaking of its design and functionality. However, considering that the banks make a very tidy profit by handling international transfers via SWIFT and IBAN, it may not even be in their interests to roll out an international Zelle payment function just yet.

In Summary

In summary, whilst Zelle is a great P2P app for domestic use in the US, there is no international Zelle payment option at this time and using Zelle to transfer money abroad is not possible. Still, we may see Zelle international payments in the future and for now, using Wise is a great alternative to using Zelle to send money abroad.