[asdfasgasdgasdg]

The banks aren't going to make you whole when withdraw a thousand bucks from the ATM and send it to someone. These denied refunds follow the same principle. There are warnings all over every zelle implementation I've used saying that using zelle is like using cash, don't send it to someone you don't know, etc. But people still do it anyways.

Btw crypto is worse on this in every way and there is no system that actually solves this problem. I wonder if it is even possible to solve.

[criddell]

Is Zelle really like using cash? It seems closer to an electronic transfer than withdrawing dollar bills. With cash they have no way to know what I'm doing with the money but with a transfer, they know a little bit more and so they have more responsibilities (IMHO).

[asdfasgasdgasdg]

It is the intentional decision of zelle to be like using cash in terms of rollback guarantees. This is so that payees can accept it like cash. There's no way to balance the scales -- the payment system that can be rolled back has its own issues.

[twblalock]

For large transactions this is somewhat solved by escrow companies.

In the end it all has to come down to trust. If all transactions were easy to reverse, we would see the opposite problem: scammers who pay people money and the. demand it back, claiming fraud.

[asdfasgasdgasdg]

Yep. Happens in the credit card world all the time. Porn is a good example of a business that has a lot of trouble functioning due to fraudulent chargebacks.

[livueta]

> Btw crypto is worse on this in every way

In a technical sense you're correct; in both cases the transactions are effectively irreversible. That said, I think there is an important difference:

Everyone (well, kinda) knows that a crypto transaction is irreversible; that's basically the point. Because of this, it is expected and normal to layer on extra systems to cope with the risk of not having an authority to dispute stuff to. Consider darknet markets: they use escrow and reputation systems to protect both parties.

But everyone (well, kinda, in the same sense as the above) also knows traditional financial institutions are "safe" and that transactions are reversible. That false sense of security means other security/resolution methods aren't considered, so when the centralized authority has a bad day the end user is out of luck.

But isn't an escrow system just another centralized authority? Sure, but at least I can choose what escrow system I want to interact with. The banking cartel behind Zelle doesn't afford me the same degree of choice, and using small credit unions isn't a panacea either because they farm out everything complicated to one or another of the payment cartels. Quality of escrow system is an important discriminator when choosing a DNM; I wish I could assess various traditional financial institutions' likeliness to rip me off as effectively.

If centralized financial institutions want to act like crypto in terms of irreversibility, fine, but I think the scale of the problem described in TFA indicates that some "are you suuuuuuuuuuuuure you want to send money to Joe Blow" popups in the app aren't enough to overcome that aegis of "this is a safe institution" floating around in the public consciousness. I see it as more a problem of false advertising than anything else, really. Copy from the landing page of their site:

> Zelle® works between U.S.-based banks. Which means, even if you bank somewhere different than your friends and family do,1 you can still use Zelle® to safely send and receive money straight from your banking app.

> safely

Obviously it's not a legal doc or anything, but I'd argue the service is both explicitly and implicitly casting itself as akin to a bank-provided service like a credit card, not something as wild west as cash.