Katherine Gustafson is an author and personal finance expert from Portland, Oregon. She writes about investing for Wealthsimple as well as having written for Forbes, Business Insider, TechCrunch, and LendingTree. Katherine is a past recipient of the Izzy Award for outstanding achievement in independent media. She has a BA from Amherst College and an MA from Boston University.
The idea of sending someone a cheque these days is almost laughable, especially for people of a certain age. Technology has transformed our lives in this way, as it has with so much else. We can now send money incredibly easily and almost instantaneously with a few taps on our mobile devices.
Does anyone even remember cash?
As in other countries, the digital payment scene in Canada has been rapidly evolving for the last decade. Canadians have their own special focus on something called e-transfer, but that service is quickly being overshadowed by other digital payment apps.Wealthsimple offers an automated way to grow your money like the world's most sophisticated investors. Get started and we'll build you a personalized investment portfolio in a matter of minutes.
What is e-transfer?
An e-transfer, otherwise knowns as an email money transfer (EMT), is a banking service through which users can transfer money between personal accounts digitally. You can use e-transfer to send money to the babysitter or dog walker, to pay for something from an online seller, or to settle a debt with an institution.
This particular form of digital money movement is mostly used in Canada, and the term “e-transfer” is actually derived from the branded service Interac e-Transfer, even when it’s used to refer to other methods of sending money such as payment apps.
What methods of e-transfer exist in Canada?
Taking “e-transfer” to mean digital payments broadly, there are various e-transfer methods people are using on a daily basis across Canada.
The most prominent e-transfer service‚and the one from which the service gets its name‚is Interac e-Transfer, a fast and secure method of digitally sending money to any recipient in Canada via established banking procedures. The service, run by non-profit interbank network Interact, grew 52% in volume in 2017, handling 41 million transactions that totaled over $92 billion.
When you transact with Interac e-Transfer, the money is drawn right out of your bank account and sent to the account of your target recipient. E-Transfers are often virtually instantaneous, but they can take up to a half-hour depending on the institutions doing the transacting. Interac e-Transfer works with more than 250 financial institutions, and fees may be applied by the user’s bank. Interac e-Transfer users can send money overseas via partnerships with Mastercard and Western Union.
While Interac has had digital money-transfer all sewn up in Canada, there is now a shift in the landscape as more and more cash apps are entering the market. Users generally sign up with their phone number or email address and can send money back and forth using these identifiers.
Here are some of the prominent apps that allow you to send money digitally and instantly to other users in Canada:
A new entrant into the field of digital payment apps, Wealthsimple Cash lets you instantly send money from one username to another with zero fees. The elegant and simple interface is easy to use, making sending money more fun.
Apple Pay Canada:
Apple Pay arrived in Canada in 2011 but it took until 2016 for the app to link up with all the Canadian banks. It now connects with most national and provincial financial institutions and credit unions in Canada.
Google Pay Canada:
Google Pay is like Apple Pay but for Android phones. Like Apple Pay, it is very popular and syncs with all major Canadian financial institutions’ credit and debit cards.
Samsung Pay Canada:
This newer arrival came on the scene in 2016 and is still not compatible with many Canadian banks and loyalty programs.
PayPal allows you to send money to any recipient almost anywhere in the world if they have a PayPal account. The one drawback of this app is that you can’t use it to pay with a tap at a physical retailer, like you can with some others.
Wise is an option for Canadians looking to send money to a recipient in another country. The simple interface shows clearly what your exchange rate and fees will be for the transaction.
Does Venmo exist in Canada?
No, Venmo is not available in Canada. You and the person you’re sending money to both must be in the U.S. in order to use Venmo. You must also have a U.S. phone number.
Not that the above services are similar to Venmo and allow you to send money to others instantaneously with the click of a button.
Does Cash App exist in Canada?
No, Cash App is also not available in Canada. This app, owned by Square Inc., is popular in the US as a method of easily and rapidly sending money to other users. But just like Venmo, Cash App is not available to Canadian users.
The good news is that Canadians can use Wealthsimple Cash to send money easily and immediately with zero fees.
The bottom line
Interac e-Transfer is still the most prominent way to send and receive money quickly in Canada. Despite its popularity, it has some disadvantages: It is only available to those whose financial institutions participate, and users may have to pay fees to send or receive money.
Other options are quickly starting to give it a run for its money (so to speak). Users are increasingly adopting various other digital payment apps that make their lives easier. While a couple of the more popular payment apps active in the US aren’t available in Canada, Canadians have access to some great alternatives, like Apple Pay, Google Pay, and Wealthsimple Cash.
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