Inquiry Line (Signal only)

Live Broadcast

Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

Facebook
Twitter
LinkedIn
Pinterest
Pocket
WhatsApp

Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

Big banks are making it easy to zap money to your friends. Maybe too easy.

Zelle, a service that allows bank customers to instantly send money to their acquaintances, is booming. Thousands of new users sign up every day. Some $75 billion zoomed through Zelle’s network last year. That’s more than twice the amount of money that customers transferred with Venmo, a rival money-transfer app.

But the same features that make Zelle so useful for customers, its speed and ubiquity, have made it irresistible to thieves. Hackers and con artists have used the system to steal from victims — some of whom had never used Zelle or even heard of it until someone used it to clean out their bank accounts.

Interviews with more than two dozen customers who had their money stolen through Zelle illustrate the weaknesses that criminals are using in targeting the network. While all financial systems are susceptible to fraud, aspects of Zelle’s design, like not always notifying customers when money is transferred — some banks do; others don’t — have contributed to the system’s vulnerability. And some customers who lost money were made whole by their banks; others were not.

For the banks, Zelle is a big — and must-win — bet on where money is headed. As consumers become increasingly accustomed to splitting dinner checks, paying for their morning coffee and hailing an Uber without touching paper money, banks are rushing to stake their claim on the wallet of the future.

Continue reading the main story

In recent years, apps such as Venmo (which is owned by PayPal), Popmoney, Square Cash and Apple Pay made digital cash transfers quick and simple. Banks were falling behind. So they joined up to create a rival product, run by Early Warning Services, a Scottsdale, Ariz., consortium that is jointly owned by seven large banks.

Continue reading the main storyRead the Original Article

Facebook Comments
Facebook
Twitter
LinkedIn
Pinterest
Pocket
WhatsApp

Never miss any important news. Subscribe to our newsletter.

Recent News

Follow Radio Biafra on Twitter

Editor's Pick