In the not-so-distant past, sending someone else money could be a huge pain. It required writing a check, getting cash out of an ATM, wiring funds or setting up a manual bank transfer.
The introduction and eventual surge of peer-to-peer payment apps have eased the hassle of paying the piano teacher or babysitter, splitting the dinner bill with friends or repaying roommates for bills. These new options are faster, more efficient and way less of a headache. Over time, as new options and features arrive, consumers have more choices than ever on how to move money.
The best ways to send money include peer-to-peer payment apps like Zelle and Venmo. Here's what you need to know about some of the current top options.
1. Zelle
Why it's a good option:
If you're tired of downloading an app for everything, you might appreciate that, if your bank or credit union offers Zelle, you can use it through your banking app. No separate app required.
Money sent with Zelle transfers between bank accounts, typically within minutes. You can send funds using someone's phone number or email address, which is often easier than trying to remember a username like with other payment apps.
Benefits of using Zelle:
- It's already integrated in many banking apps. If it's in yours, there's no need to download a separate app (though you can if your bank isn't partnered).
- Zelle doesn't charge fees to send or receive funds, though it recommends checking if your financial institution adds fees.
- You only need someone's phone number or email address to pay them.
Key terms to consider:
- Recipients must have an eligible bank account based in the U.S.; it's not for international payments.
- If your bank doesn't use Zelle, you can only send $500 weekly and receive $5,000 per week on the app (if your bank uses Zelle, limits are set by your bank).
- You can split a bill with people using Zelle via your financial institution's app.
- If you use Zelle through your bank or credit union and have an issue, you may have to deal with both Zelle and your financial institution to resolve it.
- You can send money to a recipient without Zelle, but they must enroll to receive the money. If they haven't enrolled in 14 days, the money returns to your account.
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2. Venmo
Why it's a good option:
Venmo launched in 2009, then was acquired by PayPal in 2013 as a straightforward digital wallet. With PayPal's solid track record and no existing apps like it, Venmo took off as a way to quickly and easily pay friends and family. Over time, it became more common to be able to pay businesses with Venmo, though it's only available for U.S.-based users.
Benefits of using Venmo:
- When withdrawing your Venmo balance to your bank account, there's no fee for standard transfers, which typically arrive in one to three business days to a bank account or 48 hours to a debit card. You can opt for an instant transfer for a 1.75% fee (minimum of 25 cents and maximum of $25).
- It's free to send money to others with your Venmo balance, bank account or debit card. Venmo charges a 3% fee for sending with a credit card, plus any issuer fees.
- You can easily split bills with friends, either one-off for meals or by tracking ongoing costs with Venmo Groups.
- Many retailers and small businesses now allow Venmo payment online and in person.
- Venmo offers a debit card that earns cash back for convenient payments.
Key terms to consider:
- Once money is transferred to an active Venmo account, it can't be canceled. If you accidentally send money to the wrong person, Venmo support may be able to help—but it's possible you won't get the money back. (But if you accidentally send it to an email address or phone number without an active Venmo account, you can get refunded.)
- Transactions can appear to your friends in a social feed; change your settings to private if you don't want everyone seeing your spending (or your friends' comments when they send you money).
- Venmo offers a teen account with a Venmo Teen Debit Card for parents.
- While you can send a Venmo to anyone, if the recipient hasn't made an account, they'll have to set one up before they can actually receive funds.
3. PayPal
Why it's a good option:
PayPal may be the oldest option here, but for good reason. It launched in 1998, then became eBay's official payment provider in 2002. It remains the most popular digital wallet company today with its strong track record and security features. It's free to send and receive money with a bank account.
Since PayPal didn't start as an app, it has a robust website that's also easy to use. This can be a benefit if you prefer to handle payments from your computer or simply don't want to download another app. With PayPal, you also have a variety of options on how to pay. You can pay with your PayPal balance, your bank account, a credit card or a PayPal-branded debit or credit card.
Benefits of using PayPal:
- PayPal can be used to send or receive money from a person, and some online retailers have an option to pay using PayPal rather than entering your card details directly. It costs nothing extra (unless there's a currency conversion).
- PayPal encrypts data, ensuring payments are submitted securely and have purchase protection should you not receive the item or the order doesn't arrive as described.
- You can make international payments (for a fee).
- The Pay Later option lets you split up purchases and repay without interest.
- PayPal has a rewards program for using it to pay when shopping, with higher rewards for transactions with their debit or credit cards.
- There's a feature to split bills with friends and family.
Key terms to consider:
- It's free to send money to someone with a bank account, PayPal balance or Amex Send account. If you pay with a credit or debit card, there's a 2.90% fee plus a flat fee based on currency (currently 30 cents for the U.S. dollar). There's no fee to receive a personal transaction without currency conversion.
- If you've been sent money, standard transfers to your bank account or cards are free. Or you can opt for instant delivery for a 1.75% fee.
4. Cash App
Why it's a good option:
Cash App is a standalone app that's grown in popularity, and you can use it to send money (or stocks or Bitcoin). Unlike most other mobile payment options, there are never fees to send or receive money, even international transactions.
You can get money out of your Cash App account by transferring to a linked bank account or debit card, or at an ATM. The service has an optional Cash App Card, a debit card linked to your account that comes with shopping discounts.
Benefits of using Cash App:
- There are no fees to send or receive money, even international payments with currency conversion.
- You can use Cash App to pay at businesses that have Square terminals.
- You can send money with only someone's email address or phone number.
- No bank account is required to use the Cash App. You can have direct deposits go to your Cash App account, or deposit paper bills into your account with participating retailers.
Key terms to consider:
- Since payments between Cash App users are instant, once you've sent money, a transaction usually can't be canceled.
- When cashing out, standard deposits to bank accounts take one to three business days and are free. Instant withdrawals to a linked debit card cost a fee of 0.5% to 1.75% (minimum 25 cents).
- A recipient doesn't have to be on Cash App for you to pay them, but they'll have to create an account within 14 days to get the money you send. Otherwise, the sender gets a refund.
- In-network ATM withdrawals are free, though there's a $2.50 fee at out-of-network ATMs.
The Bottom Line
These are just a few of the top current ways to send money. Many others exist, especially some that are ideal for specific situations. For example, Wise is an excellent option if you need to make international payments, and Google Pay has a good reputation with Android users.
Regardless of which method you use, fraudsters don't discriminate. Criminals often use peer-to-peer payment apps for fraud, with many scams to try to trick users out of their money. Before you get started, learn about how to avoid payment app fraud, and don't forget there are still older, safe ways to deposit money into someone else's account if needed.