Flee PayPal
Do not use any service that uses Plaid.
Regardless, avoid PayPal and Venmo at all costs, as there are reasonable alternatives for many use cases. They have avoided regulation more traditional financial service providers operate under (banking regs), so using them is to invite suffering.
Zelle is a trade name of Early Warning Systems, which maintains databases of what you do in your bank account (checks paid and deposited, monthly balances, etc.). I would assume the banks that have native Zelle integration are required to become members and share this information anyway.
https://www.earlywarning.com/about
If your threat model is that you don’t trust your bank with your deposit account balance and transaction history, that is hard to mitigate. I don’t necessarily trust my bank, but I do know what regulators to call for recourse when they misstep.
Where can I find more info about the '8 months' estimate? I hoped RTP would be useful to me, but the only bank that allows consumer accounts to use their RTP network is Chase. I hope this new network also doesn't fall short of the promise.
I have been a long-time Venmo user and have refused to ever link my account through Plaid. Starting a couple years ago, Venmo begin to intermittently claim they "Lost the connection" to my bank and forced me to link via Plaid. I always refused and the problem eventually went away. Now, I cannot send money to anyone via Venmo. It always gives me the same error message and asks me to link via Plaid. Extremely dark pattern.
Otherwise, I agree with plaid being bad.
And that's varying by bank too. I can only send $1000 per day total by Zelle (except a "day" is much longer than 24 hours usually) and some accounts are silently rejected as recipients. My girlfriend has to pay the rent (I pay my share to her over multiple days) because I can't send to my landlord at all and even if I could, the amount would be wrong. She has neither limit.
There's a nonzero chance you will hit some kind of risk/fraud system based on amount too.
Wire is much better but frequently $50-100 per transaction as a fee.
Just for comparison, in Germany, bank transfers are free and take 1-2 days, for a fee or free (depending on the bank) you can do instant transfers taking seconds.
(If you don't explicitly have overdrafting off, so that it would just fail your transaction instead of letting it go through. The default setting may have changed in the last decade due to law but I remember these scenarios vividly)
$0 balance
+$20
-$1
-$1
-$1
Within a day or two of each other won't necessarily be positive $17 balance.
It could easily become:
$0 balance
-$1 (overdraft fee $40)
-$1 (overdraft fee $40)
-$1 (overdraft fee $40)
+$20
= negative $103 balance
Banks make a lot of money doing this to poor people. The financial class is full of super-predatory behavior.
Gaining access to a credit union was one of the best things that ever happened to me.
I've seen plenty of stores selling stolen merchandise and pirated goods via PayPal so these terms of use make a lot of sense to me.
My personal experience with both Paypal (we are forced to use) and Wise is that Paypal does is setup completely against users. There are many hidden fees, no guarantees and they just exploit their position. For example if you are based in country with different currency than the one you are in (somebody sends you USD and you use EUR) Paypal will automatically convert the money to EUR with their outrageous fee (basically taking 5% just on top of all other charges). There is no way to avoid this, you cant send money to USD account even if it’s in country you are based in.
Wise on the other hand saves people money. The fees are visible. Conversion rates are better than what most banks give you. Their services evolve (like you can get debit card now).
Paypal and Wise in my experience cannot be further from each other.
If PayPal is actually going to enforce this, it will obviously have to remove Netflix, Steam, any book store from their platform, since they run terribly afoul of most of the above.
So if Transferwise and PayPal are equally bad, you might still want to give your business to the smaller company?
Actually, it is not that straightforward. One should check what kind of customer service is available, where are they located, who has access to the account and information and yada yada yada.
PayPal is a much safer choice than Wise in this aspect.
(I found Transferwise easier to deal with than PayPal, but I never had any dispute with either.)
Some American banks participate in a network called Zelle, which does allow instant electronic funds transfer. But, Zelle is available exclusively through your bank's phone app.
In many European countries, you can send money for free directly between banks in seconds without even as much as a fleeting thought that there are private companies doing the same service.