Interac is expanding—first up, Wealthsimple e-transfers will get easier

By Margaret Montgomery on September 29, 2023
Estimated reading time: 3 minutes

If you use a fintech for banking or investing, Interac e-Transfers might get a bit easier to send and receive. Find out why.

That may change in the near future. On Sept. 29, Interac announced that it is expanding access to e-Transfer services among different types of financial institutions in Canada. Wealthsimple is the first of these to be “provisionally accepted.” Before the announcement, only federally licensed financial institutions (like banks), provincially licensed credit unions and some challenger banks were direct participants in Interac e-Transfer services, says Will Keliehor, Interac’s chief commercial officer.

Previously, Wealthsimple accessed the Interac e-Transfer system indirectly through a banking partner, an arrangement that meant higher operating costs for the company and e-Transfer limitations for clients. Wealthsimple was able to get the settlement time (the time it takes for money to arrive in your account and be ready to use) down to 30 minutes or less, but now it will be able to offer clients near-instant settlements.

“Becoming a direct participant is game-changing,” says Hanna Zaidi, chief compliance officer of payments at Wealthsimple. “It means we can offer our clients a better experience when moving their money—things like higher transfer limits and faster settlement times—which are important factors when making investment decisions.” She adds that Wealthsimple clients “want to use e-transfer to fund their accounts because it’s fast and seamless.”

Other methods, such as bank transfers, for example, can take a few business days to complete.

Besides using Interac e-Transfer to move money around, customers can also fund their Wealthsimple Trade self-directed investing accounts or Wealthsimple Crypto accounts by transferring part of the balance from their Wealthsimple Save or Wealthsimple Cash accounts.

Is Wealthsimple a bank?

No. Wealthsimple is a financial services company and securities dealer with more than three million Canadian clients. Although Wealthsimple isn’t a bank, some of its accounts are protected by the Canada Deposit Insurance Corporation (CDIC) through partnerships with federally regulated Canadian financial institutions. The Wealthsimple Cash account (which is a hybrid chequing and savings account) has three times the average CDIC insurance coverage, at up to $300,000. The account doesn’t charge any fees for the newly improved e-transfer service, and allows clients to get 1% cash back that can be automatically reinvested in stocks or crypto when they use the Wealthsimple card. (Read our review of Wealthsimple Cash.)

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“High banking fees, unnecessarily long payment and asset transfer times, increasing interest rates, and the rising cost of living are taking a toll on Canadians,” says Zaidi. “Which is why we’re building products and solutions that offer them greater value and help put their money to work.” (Learn more about how fintechs and neobanks are changing banking in Canada.)

What does the Interac expansion mean for the future of Canadian banking?

Interac’s announcement means that Canadians may soon be able to expect the customer experience at fintechs to be more like that at a bank or a credit union. “It’s a great step forward towards adding more competition,” Zaidi says.

Keliehor says it’s a win-win situation for fintechs and customers. “Interac wants to move at the speed of fintechs because they’re constantly innovating the digital economy,” he says. “And that’s good for all Canadians, because it gives faster access to products that can add value in people’s lives.”