Better Than Venmo and Zelle: Transfer Money with Push-Only ACH

As I mentioned in a previous post — Pay Someone By Zelle: Daily Limit and Recurring Payments — the ACH system in the U.S. is set up to be bidirectional by default. A routing number and an account number can be used to both deposit money into the account and withdraw money from it.

This makes it difficult to transfer money to another person because people don’t want to reveal their bank account number, fearing you might take their money. As a result, person-to-person transfers are typically done through third-party services such as Venmo, Zelle, PayPal, Cash App, etc. Both parties must use the same service. You can’t do it if you have Venmo and they have Zelle. Either you must also sign up for Zelle, or they must also sign up for Venmo.

Each third-party service has its limitations. They work for smaller transfers, but they often don’t work for larger ones. Bank of America limits Zelle transfers to $3,500 per day. If you want to transfer $5,000, you’d have to split it into two days. Many banks have lower Zelle transfer limits than Bank of America.

Trusted Parties

Some people don’t mind sharing their bank account information with you when they know and trust you. Say you’re giving annual gifts to your adult children, or you’re paying a mom-and-pop landlord monthly. They’re willing to give you their bank account for you to deposit into. Even then, it’s not that easy to transfer money to their bank account.

Many banks only allow linking to accounts that you own. They require verification to confirm that you have control over the target account. It’s done traditionally by micro-deposits. Lately, many banks have moved to using instant verification services such as Plaid or Mastercard Data Connect (formerly Finicity). This requires logging into online banking at the target bank. Banks see who owns the target account in this process. They won’t allow the link when names don’t match.

Intra-Bank Transfers

Some banks support transfers between customers within the same bank. Many credit unions also have this feature. They call it member-to-member transfers. Suppose your child is attending college out of state. If both of you have accounts at the same bank or credit union, you can transfer to your child’s account internally.

It’s feasible to make this arrangement with a child. It’s difficult to do the same with your sister unless you happen to use the same bank.

Bill Pay or Mail a Check

You can use Bill Pay to pay an individual. The Bill Pay provider will mail a paper check. Or you can mail a check yourself. Both are subject to delivery delays and potential loss or theft. That’s not a good way.

Wire Transfers

You can also send a wire transfer, but many banks charge a fee for wires. Even if you get free wires from your bank, many banks also charge a fee for receiving a wire. Making your family member or your landlord pay a fee to receive money from you isn’t that great.

Push-Only ACH

Fortunately, some banks allow a push-only link for ACH/EFT. They don’t require ownership verification for this type of link when they disallow withdrawing money from the target account. For instance, when you link an external account to Bank of America, it asks you whether you want the account to be “only transfers to” or “for transfers to and from.”

Selecting “for transfers to and from” requires ownership verification through Plaid. Selecting “only transfers to” doesn’t. If you use Bank of America, see the detailed walkthrough in How to Link an Account to Bank of America for ACH Push.

Fidelity

I use Fidelity for most of my banking (see 2 Ways to Use Fidelity as a Bank Account). When you link a bank account, Fidelity asks whether it’s owned by you or by someone else.

Linking a bank account you own creates a bidirectional link; you can push money to that account or pull money from it. It requires ownership verification. Linking a bank account owned by someone else creates a push-only link. You can transfer money to that account, but you can’t withdraw from it. It doesn’t require ownership verification.

Fidelity will go through a banking industry process called “prenote” to confirm that the target account is valid. A prenote requires waiting at least 3 business days before sending the first transaction. Give it about a week of setup time before you need to transfer money. Once the link is fully set up, the transfer arrives on the same business day if you request it early enough in the morning, or on the next business day if you miss the cutoff. It’s almost as fast as a wire transfer.

You can transfer up to $100,000 per day by EFT/ACH from a Fidelity account. It’s not possible to transfer that much by Venmo or Zelle.

Fidelity only supports one-time transfers on push-only links. You can’t schedule transfers for a future date or set up recurring transfers to another person, whereas you can set up scheduled or recurring transfers to your own accounts.

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Having an account that supports push-only ACH to another person’s account makes it easy to transfer a larger amount than using Venmo or Zelle. The receiving end doesn’t require any special setup. They only need to give you their routing number and account number. It’s free on both sides.

If your bank also supports push-only ACH transfers to another person’s account, please include its name in the comments so other readers know where to go besides Fidelity and Bank of America.