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TAXFlash News from IncomeTaxCanada.net
:: Using email to send cash? Not such a crazy idea now that Canadian banks back the novel idea
:: “Fat chance” was my first reaction when I heard about using e-mail to send cash. In my mind, e-mail is the electronic equivalent of sending a postcard through the mail. In fact, I’d say it’s even worse from a privacy standpoint since, not only can you not be certain who will read your post, the number of potential readers is exponentially greater. If you’re looking for proof, look no further than the incredible speed computer viruses spread around the world. Your private e-mail could waltz around the planet just as fast unbeknownst to you and the intended recipient. My “get real” reaction turned to curiosity upon learning that four of the heavyweights in Canadian banking had signed on - Bank of Montreal, CIBC, Scotiabank and TD Canada Trust. Noticeably absent is the Royal Bank, although, I expect they’ll sign on shortly unless they decide to make a go of it on their own which is unlikely. If sending cash by e-mail proves successful other Canadian financial institutions will undoubtedly hop on board. The process of sending cash by e-mail is really quite simple: you log on to your on-line banking in the normal manner, click through to the appropriate page on the website, indicate the recipient of the funds by entering only their e-mail address, complete the e-mail money transfer (EMT) information request (amount, account from which funds are to be withdrawn and a security question) and then hit the send button. Voila! Your account is debited and there goes your money. At this point a third-party, CertaPay (CertaPay.com), generates an e-mail notification message that is delivered to the recipient’s inbox. The recipient opens the mail message with hyperlinks to his/her bank of choice to deposit the transferred funds. After correctly answering the security question, the recipient’s account is credited with the transferred funds. And that’s all there is to it. The key point to understand in using e-mail to send cash is that e-mail is only being used for notification purposes – your money does not transfer via e-mail. Rather the actual transfer of funds from one bank to the next occurs using the same inter-bank settlement system that has been used for years to process cheques, ABM transactions and online bill payments. Your precious cash always resides safely at your bank where it is federally insured under the terms of the CDIC and not floating somewhere out there in cyber never-never land. Obviously, in order to send cash via e-mail you need to bank on-line. With over 5 million Canadians currently bank on-line at Canada’s five major banks this shouldn’t be a significant limiting factor especially when you consider that the recipient does not need to bank on-line. All that is required on the recipient’s end is an e-mail address (approximately 15 million Canadians have one) and a Canadian bank account – that’s it.
Now nobody is naive enough to believe the banks are prepared to offer this service free of charge and they’re not, although, some banks are offering free trial periods. For example, Scotiabank is offering to waive e-mail transfer fees until November 1, 2002 after which it will cost you $1.50 per transaction. According to their web site, the CIBC’s “no fee” deal runs for a “limited time” after which the same $1.50 per transaction fee will apply. Despite the fee, this is still a pretty good deal when you consider what it costs to write and mail a cheque to someone to say nothing of the uncertainty if and when it will ever arrive. One obvious use of “cash by e-mail” is settling up debts for on-line purchases and auctions, although the program only works in Canada at this point. E-mailing cash avoids the need to divulge credit card and other personal information over the internet to who knows who. In fact, the CertaPay website compares “cash by e-mail” to PayPal noting that, by using CertaPay, funds are guaranteed, move instantly, always remain in a federally insured account and are offered directly to you by your existing bank accounts. The same cannot be said for PayPal. Furthermore, while PayPal doesn’t charge the transferor they do charge a fee to the recipient (according to CertaPay’s web site $0.30 plus 2.9 per cent). CertaPay is the world’s first real-time, bank-to-bank e-mail money transfer system. I expect that over time, as more Canadians acquire on-line banking savvy and more national and international financial institutions sign on, e-mail cash transfers will grow in popularity putting yet another nail in the coffin of old-fashioned cash. There was a time when we’d panic if there was little cash in our wallets, now we’re starting to question why we bother carrying it.
Free Tax Advice Article Submitted to Income Tax Canada.net exclusively by Jim Maroney Official details about this and other topics on income taxes can be found in English & Francais at www.ccra-adrc.gc.ca Income tax information offered by www.IncomeTaxCanada.net is done so without endorsement by Canada Revenue Agency (CRA) - l'Agence du Revenu du Canada (ARC) (formerly Canada Customs and Revenue Agency - l'Agence des Douanes et du Revenu du Canada CCRA-ADRC and formerly Revenue Canada – Revenu du Canada) or any Canadian government agency. The free advice is of a general nature for Canadian taxpayers seeking legal ways to reduce their personal and small business income taxes payable to the federal and provincial (or territorial) governments in Alberta, British Columbia, Manitoba, New Brunswick Newfoundland-Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan or Yukon. Specific taxation situations vary from taxpayer to taxpayer, province to province, territory to territory. The free tax advice here is only a general guide. Canadians should always seek individual guidance on accounting rules and tax laws from knowledgeable accountants and lawyers. To prepare your income tax return online and NetFile your Canadian income taxes electronically in English or Francais, please visit www.ufile.ca or www.impotexpert.ca websites. Additional information on financial products and services for Canadians can be found at www.CanadianCreditCenter.com. |
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Jim Maroney