What is e-Transfer in Canada?

Most of us have probably sent an e-Transfer before. Whether you use the system to pay your rent, send a birthday gift to your nephew, or cover the cost of the dog sitter while you’re away, there is no arguing that this way of transferring money is convenient. Not to mention popular as we move away from cheques and paper bills towards a more electronic-based system.

Today, Canadians look for fast, efficient ways to move money. E-Transfers deliver exactly that. They allow you to send funds in a matter of minutes without handling cash or visiting a branch. Nearly every major bank and credit union in Canada uses Interac to power these transfers, which makes the experience seamless and familiar no matter what bank is the best for you.

In this guide, we’ll review how e-Transfer works in Canada, features of the payment method, and how secure it really is.

What is an e-Transfer?

Before we can get into understanding the process of e-Transfers, it’s helpful to review what an e-Transfer actually is. In Canada, an e-Transfer is a simple, efficient way to send money from your bank account to someone else using their email address or mobile telephone number. Instead of needing to enter their account number and corresponding details, you will instead just enter their contact details and the transfer amount. Your bank then takes care of the rest.

The e-Transfer system runs through Interac, which works to securely connect financial institutions. When you send funds through an e-Transfer, it’s Interac’s job to make sure they transmit the correct messaging to the recipient’s banks so that the funds land in the right account.

How e-Transfers work in Canada

Now, you may know (and use) e-Transfers, but do you know how they work behind the scenes? Even though the process is simple from the sender or receiver’s perspective, there is a lot happening behind the scenes to ensure your money moves safely.

It all begins when you enter the recipient’s email address or phone number and select the amount. Once you confirm and submit the transfer, your bank coordinates with Interac to start the transaction. Interac then notifies the recipient, providing instructions on how to deposit the e-Transfer funds.

If the recipient has set up Autodeposit, the transfer then lands in their bank account automatically. It requires no additional steps. If Autodeposit is not enabled, though, then you both need to provide more information. The sender will need to create a question and answer that only the recipient will know. The recipient, once they receive the real-time transfer alert, will need to enter the secret answer in order to move the funds. And you, the sender, will also get a notification to help you track the payment.

E-transfer features Canadians should know

E-transfers come with tools that make everyday payments smoother and safer. These include:

• Autodeposit: This feature allows a recipient to accept funds into their account without any extra security questions. Instead, the process happens automatically. This aids in speed of transfer but also helps reduce the risk of fraud as no one else can intercept the transaction.
• Request money: The tool is useful for freelancers, landlords, or anyone collecting payments.
• Real-time notification: You, as the sender, can receive alerts when the transfer leaves your bank account and when the recipient deposits it. Confirmations help Canadians stay organized when managing multiple transfers or bill payments.
• Bank-specific limits: Check directly with your bank as each financial institution and account has a different daily, weekly and monthly limit. For example, CIBC allows you to send up to $3,000 in a 24 hour timespan and as much as $10,000 in a 7-day period.

Are e-Transfers safe in Canada?

Interac e-Transfers are, in fact, safe. The Interac system offers bank-grade security every time you send or receive money as transactions travel over secure payment networks.

That said, fraud usually targets users, not the system itself. To ensure you keep your money safe, always use strong passwords, verify contact details and avoid unknown senders.

Takeaway

E-Transfers have become a “go-to” for Canadians when sending money and it’s easy to see why. The transfer system moves quickly, securely and work across almost every Canadian financial institution. Now that you understand how the payment system works, you can send money with confidence. Just be sure to take a moment and double-check all information before you press the “Send” button.