The way we move money is changing, in a big way. As more and more people move away from cash and cheques, the world of online transfers skyrockets. Online transfers have grown a staggering 569% over the last five years alone. With no signs of stopping or slowing down, the time is now for businesses to capitalize.
The annual Payment Methods and Trends (CPMT) report came out last month, and we recommend you take a look. The report takes a deep dive into the 2020 payment space, providing insight into what lies ahead. Looking at how people (and businesses) chose to pay over the last year gives us a glimpse of the future.
In this article, we shine the spotlight on online transfers. We crunch the numbers to determine how much change was happening and why. In addition, we explore the benefits these digital payments have in this ever-changing space.
Online Transfers (electronic payments) are made between end-users or *businesses. The electronic payments are either pre-funded, linked to a deposit or Canadian account.
* Learn more with our B2B Payments: A 2022 Guide to Business Payments.
In Canada, often Interac e-Transfer® or PayPal are the ones that stand out for online transfers. And this is the space to watch. The movement of money through online transfer is growing. 2020 saw 800 million transactions happen, for a combined total of $249 billion. Payments Canada found online transfers increased in value by 40% over the last year.
Launched in 1984, Interac Corp. started out as a cooperative venture between five financial institutions: RBC, CIBC, Scotiabank, TD, and Desjardins; by 2010, there were over 80 member organizations. Since then, it has grown in strength year after year and has been a staple in Canadians' lives.
In 2020 Interac Corp. hit new milestones, reaching historical highs as Interac e-Transfer volumes surged due to the COVID-19 pandemic. As of the beginning of May, we saw over 3.75 million transactions. While first-time users grew by 43%, the number of transactions per user increased 9% year over year.
More Canadians are using Interac e-Transfer, and businesses are presented with a unique opportunity to take advantage of this growth by embracing this payment method.
As we know, with social distancing in place, new buying and shopping patterns emerged. In the early days of the pandemic, Canadians were grocery shopping for the elderly or picking something up for a neighbour. Meanwhile, some Canadians were sending financial support to loved ones both near and far. Canadians were pooling up resources and diving up bills and tasks more than ever before. And this meant a big boom in Interac e-Transfer payments.
The five key reasons Canadian consumers are using online transfers:
At VoPay, moving digital payments is our business. Our Interac e-Transfer solution is a simple, convenient, and secure way to send and receive direct payments at scale. This has become an essential component for growth for our enterprise clients.
Security - Encrypted transactions, requiring a digital signature for confidentiality and non-repudiation. Payments include a security question.
Increased Funding Limits - Think bigger—with a $25,000 per payment limit, e-Transfer far surpasses regular Interac e-Transfer payments.
Quick Reconciliation - No more waiting. Near real-time processing with acknowledgment and daily status reports.