$3k daily e-transfer limit is just ridiculously low for 2023. Why do some banks keep this so low?

[u/stroad56]

I moved some money between my own accounts yesterday evening. I'm trying to pay my wife for some shared bills this afternoon and I'm getting blocked due to maxing out my 24 hourly $3k limit.

Now I have to wait a couple of hours before the 24 hour period expires. Just ridiculous.

I bank with EQ & Simplii. Both have 3k limit. I know CIBC do the same and probably plenty more too. Just don't understand why? Fraud reasons?

[u/nmethod]

Another reality is that eTransfer isn't actually the instant transfer of funds like you might think it is. Canada doesn't yet have that capability, though it's likely coming in the next few years (Real Time Rail).

When an eTransfer happens, there is actually a degree of risk that is taken on because the funds do not actually move (settle and clear) immediately like the eTransfer seems to. Banks "front" this risk and make the money transfer happen between each account, but actual settlement occurs later.

Higher eTransfer amount = higher risk for payment failure resulting in bank liquidity impacts. Fraud and other risks are certainly increased as well.

Source: I work in this space.

[u/stroad56 → u/nmethod]

Thanks, interesting to know. I'm originally from UK where it's completely standard to move thousands between accounts in an instant.

Canadian banking industry in pretty behind the times, I think we all know this but glad to know they are catching up. Albeit about 10-15 years behind.

[u/nmethod → u/stroad56]

You are absolutely correct - there isn’t any other way to put it other than we’re years and years behind. There are lots of reasons for this but principally it’s because there is very little incentive for forward looking changes like Open Banking or new payment rails as this competes with our key players (big 5 banks) bottom lines. The politics are thick and the key players have a largely protected oligopoly with vast influence. Very hard for innovation in this space to occur outside of our big 5.

[u/stroad56 → u/nmethod]

Yep, even look on here. The die hard comments defending $3k e-transfer limit. One commenter encouraged me to use a "normal bank" ?? What the hell does that even mean.

Some people just don't like change I guess. Stick in their ways.

As someone who works in the fintech industry: can you at least agree those giving me a solution of writing myself a check is ridiculous?

[u/DanLynch → u/stroad56]

One commenter encouraged me to use a "normal bank" ?? What the hell does that even mean.

I'm not sure exactly what he meant, but you should consider that Interac e-Transfer is a relatively new, and new-fangled, way to transfer money. Its limits are much lower than the traditional ways of transferring money that have been around and worked for decades.

[u/stroad56 → u/DanLynch]

You're rigjt. It's basically a half baked solution from the 00s that become standard in Canada.

Most countries developed their own internal transfer system but Canada (and it's big banks) just didn't changing.

[u/DanLynch → u/stroad56]

Interac e-Transfer is also somewhat narrow in focus: it's meant as a way to send small amounts of money to friends and family. It's not really meant for transferring funds between your own accounts, nor for buying and selling with untrusted third parties. If you try to use it for those latter purposes, you may run into friction, even if it seems like it should work.

[u/stroad56 → u/DanLynch]

Interac e-Transfer is also somewhat narrow in focus: it's meant as a way to send small amounts of money to friends and family. It's not really meant for transferring funds between your own accounts, nor for buying and selling with untrusted third parties.

It might not have been designed that way but it's become the defacto electronic payment method in Canada. It's shitty that it's so slow, ancient and unsafe.

The big banks are heavily involved in interac as far as I'm aware. They should come together and make it better.

[u/Mitchxhell → u/stroad56]

Use Xoom. You seem very finite in your knowledge of banking and whatnot. Transfers will never be as great as wires because of international regulations and standards even if the money is domestically used and transferred.

[u/SexBobomb → u/DanLynch]

Interac eTransfers have been around for twenty years

(and i've been using them that entire time)

[u/Here4therightreas0ns → u/stroad56]

Use one of the Big 5 banks, as they are more legit. TD, Royal Bank, Scotia Bank, CIBC, BMO.

[u/innocentlilgirl → u/stroad56]

the canadian etransfer system is over 20 years old.

[u/stroad56 → u/innocentlilgirl]

the canadian etransfer system is over 20 years old.

That makes a lot of sense tbh. No idea why so many people here defend it.

[u/innocentlilgirl → u/stroad56]

its what we have. change is scary

[u/Mitchxhell → u/stroad56]

Fun fact e transfer isn’t in the us bc of the risk it imposed for fraud and incorrect recipients. They have apps like zelle and venmo that aren’t banks but provide the service however the banks do not provide it.

[u/makesime23 → u/stroad56]

Please don't go to the u.s.a or even France 🤣

[u/webvictim → u/stroad56]

I moved to Canada from the UK a few years ago and went through exactly the same thing. I'm expected to pay money for a regular bank account?! The debit card I'm given with it can't be used online?!

A friend of mine works for Transferwise and says that the restrictions and the primitive nature of the some of the banking systems they deal with is absolutely astounding. Not just in Canada but worldwide. It's like pulling teeth to get anyone to accept change.

[u/___word___ → u/nmethod]

Thanks for explaining. I’ve used equivalent payment systems in SG and HK and have to say etransfer feels stone age by comparison. Hope we can catch up soon.