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Interac E-Transfer. The Canadian way to get paid securely online

Submitted by Darrell Domes

I am writing this to share with you one of the fastest and the most secure ways I know of to get paid from people that are and are not present at a sale.

We are all familiar with Interac, the association that was founded in 1984 as a cooperative venture between financial institutions and has since supplied debit card services for all of Canada and affiliated debit suppliers around the world. As of 2010, the Canadian network consisted of over 80 Financial institutions, over 59,000 ABM's and 450,000 Merchants locations accepting it. That all ads up to nearly $2 Billion dollars in yearly transactions in Canada alone.

Interac Debit Transactions are a standard on most merchant machines and a cost effective alternative to merchant cards that also charge a percentage. Unlike credit and charge cards, payments using a debit card are immediately transferred from the cardholder's designated bank account to your account.

A few years ago Interac introduced a new service called Email Money Transfer, which has since been re-branded Interac E-Transfer. It is a nearly irreversible method of payment making it a shoe-in for the auction industry for purchases and deposits under the customers limit, (usually $1000.00-$2000.00.)

"Interac e-Transfer – just like sending cash, only now from your online or mobile banking.” "Interac e-Transfer is a simple, convenient, and secure way to send and receive money directly from one bank account to another. All you need is access to online or mobile banking through a participating financial institution, and you can send money to anyone with an email address or mobile phone number and a bank account in Canada — without sharing any personal or financial information. It's a great alternative to cheques and cash. This allowed anyone with an email and access to their participating Financial Institution's online account, to accept and send funds freely."

What this means to you as an auctioneer? Well for one, A Safe means to get payment from a new customer or someone that you are not sure about.

Imagine a buyer that you do not know wants to place a good absentee bid on a high value item selling in today's sale. You may request a deposit be transferred to your email and have it in your account within 20 minutes or so creating a documented contract of sale between you and the buyer, through 3 separate parties, his bank, Interac and your bank. You can then execute the absentee bid with confidence. If the bid is not successful, the cost to return the money is only $1.00.

It's also the most cost effective and risk free ways of receiving funds for someone at your sale. Provide them with the invoice total, and an internet connection, your email, and A security Question and Answer and they can do the e-transfer directly to your email, you deposit it, mark their bill as paid, and all is good.

That also means, limiting your exposure of carrying a deposit book/bag with negotiables to the bank.

We have used this means of payment for nearly 5 years without one single issue, virtually $0 in additional costs and not 1 single chargeback.

This is not to be confused with other online payment options, (i.e. Paypal, Bidpay and others) which charge you a transaction fee and % ranging from 2.5-5% of the total purchase. These methods may provide the payment transfer service but with risk. A payment will be reversed out of your account in a heartbeat if a buyer makes any kind of claim, legitimate or not. You are 100% liable unless proven beyond a shadow of doubt in their view. It has cost me $1000's and I am sure many others much more to learn this.

The only issues that we know of:

  • Each institution sets their own limits, BNS is $1000/day, TD/Canada Trust allow $2000 or $2500/ day, Check with your bank to find out what your limits are.
  • Some Credit Unions including 1st Calgary, Servus and the ATB (Alberta Treasury Branch) do not currently accept online transfers. ATB has been saying "It's coming" for years now but still have not upgraded their technology to work with the system.
  • Transactions can take about 10-30 minutes to be sent to the receivers email.
  • As mentioned before, an e-transfer, once accepted is not reversible. If you are sending money, please make sure to enter correct e-mails, amounts & security Q&A.

That being said, it's the most cost effective way for anyone to get paid, it costs you nothing to receive payments and only $1 to send. Believe it or not, only 1 customer in 5 years complained about the $1 charge to send us the payment.

Imagine that!

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