Interac E-Transfer - Benefits and Disadvantages

Benefits and Disadvantages

Unlike a cheque, the funds from an e-Transfer are not frozen in the recipient's account. An e-Transfer cannot bounce, as the funds are guaranteed, having been debited from the sender's account immediately upon initiating the transfer. As long as both sender and recipient bank at participating institutions, the funds are sent and received instantly. However in some cases, for example two people with different banking institutions, transfers may take anywhere between near instant, or up to a few hours for the receiving party to get their emailed notice.

However, like any online banking mode of payment, e-Transfers are vulnerable to phishing. Many Canadians in areas where the Big Five banks have little presence or who do not bank online are penalized by a surcharge when receiving e-Transfers. Unlike a real giro, an e-Transfer requires intervention from the recipient for every single transaction. An e-Transfer goes stale much faster than a cheque (after 30 days, the e-Transfer is automatically cancelled and the sender is notified by e-mail to retrieve the funds.)