Although peer-to-peer trading has gained a lot of popularity in the cryptocurrency industry, there are still certain risks users need to be aware of at all times. Using Zelle, for example, appears to be a bad idea. Not because of the platform itself, but because of their policies. The following three reasons show why using Zelle is ill-advised.
#3 Reversals and Chargebacks
People need to fully understand the payment methods they deal with prior to accepting them for non-refundable assets such as Bitcoin and altcoins. In the case of Zelle, the company can reverse transaction on behalf of senders if they claim the transfer is fraudulent or done without their knowledge. Although not all requests will be honored, providing compelling evidence will usually result in the alleged victim getting their way.
Customer protection is an important aspect of handling online payments. Criminals come up with numerous ways to defraud consumers, and Zelle has seen a few of such incidents already. In the case of people selling cryptocurrencies and accepting Zelle, it is on the same level as dealing with PayPal. Transactions are never final, not even when the money arrives in one’s bank account. Simply avoid these kinds of transactions at all times.
#2 Not Designed for Trading
Reading the overall terms & conditions for Zelle shows this is not a payment method one should use for financial transactions. It is designed to compete with the likes of Venmo. Sending money to friends, family, and trustworthy people are its primary use cases. Anything beyond that is at the risk of all parties involved, and the consequences will be anything but pleasant if things go awry.
As such, the convenience provided by Zelle makes it appealing to some cryptocurrency buyers and sellers. That is only normal, as dealing with cash can be a hassle first and foremost. It is this lackadaisical attitude which cost one trader a lot of money and Ethereum, although they have no one to blame but themselves for trying to bend the rules in their favor.
#1 Zero Support for Cryptocurrency Dealings
Another interesting tidbit in the company’s terms of service is how cryptocurrency transactions are considered “prohibited use” of the service. This further confirms a solution such as Zelle was never designed to facilitate cryptocurrency transactions, and it can be found within the first few paragraphs of the service’s TOS. Overlooking such an important aspect makes the end user liable for any wrongdoings.
It is not uncommon for money transfer services to take a rather harsh stance on cryptocurrency these days. Although Zelle does not support cryptocurrency, it’s also not usable for traveler’s checks, money orders, equities, and so forth. The company does nothing wrong by reversing these transactions, as sellers should take their proper precautions and do the necessary research beforehand.