Money & Finance › Payments & money movement › Payment rails: how money moves from account to account
P2P apps: Zelle, Venmo, PayPal and Cash App
PayPal 1998; Zelle 2017· Institution or agency
Fact, law or dataA rule, statute, definition or measured number.
Phone apps that let people send money to each other in minutes using just an email address, phone number or username.
See it on the Money & Finance map →How it works
Zelle, launched in 2017 by big banks through Early Warning Services, moves money directly between bank accounts, usually in minutes, free and with no reversal. PayPal (1998), which owns Venmo, and Block's Cash App hold balances in the app; users fund them from a bank by ACH, a debit card, or a credit card for about 3%, and instant cash-out costs about 1.75%. Because users authorize payments themselves, Regulation E, which covers unauthorized transfers, generally does not require refunds for scams.
Why it matters
Zelle alone moved over $1 trillion in 2024. Speed and finality make these apps handy for splitting bills and paying contractors, and a favorite of scammers.
Facts, rules and data
Early Warning Services volume releases, PayPal and Block company filings, Regulation E, and suits by the CFPB (2024, dropped 2025) and New York's attorney general (2025).
Debates and risks
Who should bear losses when users are tricked into sending money is unresolved; New York's 2025 suit against Zelle's operator is testing it.
Connections (3)
▸P2P apps: Zelle, Venmo, PayPal and Cash App are a favorite tool of Scams on individuals: impostors and elder fraudFact, law or data
The connection
Impostors posing as bank staff, utilities or online sellers persuade victims to 'send money to yourself' or pay for goods that never arrive. P2P apps are instant, need only a phone number, and, because the victim authorized the payment, banks usually need not refund it.
When and why
Across US users; the CFPB alleged customers of three big banks lost over $870 million on Zelle over seven years.
How we know
FTC Consumer Sentinel data, the CFPB's 2024 complaint, New York's 2025 suit, and banks' published reimbursement policies.
Debates and risks
Whether apps should refund all scam victims, which may invite carelessness, or few, leaving losses on victims, is unresolved.
▸P2P apps: Zelle, Venmo, PayPal and Cash App drew a 2024 scam suit, later dropped, from Consumer Financial Protection Bureau (CFPB)Fact, law or data
The connection
In December 2024 the CFPB sued Zelle's operator, Early Warning Services, plus JPMorgan Chase, Bank of America and Wells Fargo, alleging they failed to stop fraud or help victims. New leadership dropped the case with prejudice on March 4, 2025, and Congress repealed a CFPB rule supervising large payment apps.
When and why
Federal court, December 20, 2024, to March 4, 2025; Congress overturned the payment-app rule under the Congressional Review Act in May 2025.
How we know
The CFPB's complaint and dismissal filing, and the joint resolution signed into law in May 2025.
Debates and risks
Whether state attorneys general, as in New York's August 2025 suit against Early Warning, will fill the gap left by the CFPB is uncertain.
▸P2P apps: Zelle, Venmo, PayPal and Cash App are often funded by Debit cards and PIN networks (Star, NYCE, Pulse)Fact, law or data
The connection
Venmo and Cash App let users fund payments or cash out instantly through a debit card, which moves money over card networks in seconds; bank transfers by ACH are free but slower. Cash App also offers its own Visa debit card, so app balances can be spent in stores.
When and why
US users of Venmo, Cash App and PayPal; instant cash-out uses push-to-card services such as Visa Direct and Mastercard Send.
How we know
App fee schedules (about 1.75% for instant transfers) and card-network product disclosures.
Debates and risks
Whether app balances, insured only if passed through to partner banks, are safe enough as quasi-bank accounts was questioned after the 2024 Synapse collapse.