Reserve Proposes Customers to Use Their Business Zelle Accounts to Process Payments – Bitcoin News
The Reserve Bank of India has proposed banks and payment companies to use the business version of Zelle system to compete with the private payments application like Paytm, Mobikwik and other digital wallets in India.
On Friday, a public filing revealed that JPMorgan Chase & Co. submitted a patent application for an “Expedited Virtual Currency Transaction System” on May 2, 2018. The system uses the Zelle network. This is the first time Zelle is used by a major banking institution. The patent is technically about making the transaction process quicker.
Reserve, a crypto-currency exchange and payment processing fintech and app, sent out an email yesterday asking its customers to help process payments using their personal Zelle accounts. This has caused some concern in the community that a third party company is using their accounts to make payments on their behalf.
The reserve allows customers to use their mobile phone accounts to process payments
Yesterday, many customers were surprised by an email that Reserve (a fintech/cryptocurrency exchange and payment processing company backed by Petro creator Gabriel Jimenez) asked them to borrow their Zelle business accounts for payment processing. The surprise email unofficially offered a reward of several thousand dollars for using these Zelle business accounts if you help the company.
Many users were alarmed by the offer and protested on social media, warning of the risks of lending their Zelle accounts to others. Zelle’s user agreement even explicitly states:
By accepting this Service Agreement, you agree that you will not collect debts by attempting to use the Service to solicit money to pay or collect a debt that is past due or in default; to solicit money owed to another person; or to collect amounts owed by a court order…..
It does not appear to allow for third party collection.
However, all of this suggests that the company has grown significantly since its inception in Venezuela and is currently struggling to handle the volume of cellular transactions processed by its payment services. The cell is a powerful tool in Venezuela, it is unofficially accepted in most retail stores in the country and is widely used. That is why it is so important for the reserve to keep a large supply of fresh cell dollars to use at any time.
Responding to emergencies in a fearful community
The news went viral on social media, and Reserve responded with a new letter to its customers to clarify what the company had meant in the earlier letter. In a new letter, Reserve apologized to his community and explained the true purpose of the offer. The new statement revealed that this was simply a call to recruit new P2P liquidity providers for the backbone or reserve partners. The Reserve pointed out:
The participation process as a payment processor at Reserve is not open, it is more limited and strict than other P2P platforms, because we are a US company subject to US laws and we want to maintain a consistent quality of service to avoid the frequent fraud that occurs in P2P models.
Yet the Venezuelans have already been taken to task by US banks for using the cell as a means of payment. Wells Fargo announced last year that it had blocked cell phone service for Venezuelans, but later reinstated it. Nevertheless, everything about the use of the cell is alarming to the Venezuelan community.
What do you think of the Reserve’s proposal? Share your thoughts on this topic in the comments section below.
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