Email Money Transfer (EMT): Definition, How It Works, Security

What Is an Email Money Transfer (EMT)?

An email money transfer (EMT) is a retail banking service that allows users to transfer funds between personal accounts, using email and their online banking service. Mostly used in Canada, email money transfers are often called Interac e-Transfers.

EMTs are considered a secure method of transferring money because the notification of the transfer is done exclusively through email. The actual funds are settled through existing fund transfer networks, which banks have used for years.

Key Takeaways

  • An email money transfer allows users to transfer funds between personal accounts, using email and their online banking service.
  • Although completed via email, there is minimal cybersecurity worry as money is not actually transferred via email.
  • The actual money is transferred via existing bank fund transfer networks.
  • There have been instances where people have had money stolen due to fraudulent interception of EMTs.
  • Nearly all online banks in Canada—including the Big Five—offer EMTs.

How an Email Money Transfer (EMT) Works

An email money transfer (EMT) is initiated when senders first open their online banking account, either on a desktop computer or a mobile application. They will then select the amount to be sent and the specific account, from which the funds will be withdrawn. They choose the recipient of these funds. When confirmed, funds are instantly debited.

An email with an answer to a specific security question is sent to the recipient of the funds; in addition, separate instructions are sent to the recipient regarding the retrieval of the funds via a secure website. To access the funds, the recipient must correctly answer a security question. After a set number of incorrect attempts, funds could be returned to the sender.

If the recipient successfully moves past the security blockade, the funds will be deposited immediately, generally at no additional charge, if the recipient is signed up to a participating online banking institution. It could take three to five additional business days if the recipient is not subscribed to a participating online banking institution.

EMTs can also be facilitated through auto deposits, which removes the necessity of checking your email and answering security questions. This is a service that a customer would sign up for and go through the appropriate security measures to set it up.

EMTs are often referred to as an Interac e-Transfer because the service is provided by Interac, which is a Canadian company involved in creating interbank networks to facilitate financial transactions between banks.

Interac also offers the email money transfer services for businesses, which has options like bulk processing services, bulk receivables, and bulk payables, as well as invoicing capabilities to a business's customers.

Criticism of Email Money Transfers (EMTs)

The big worry with an email money transfer (EMT) is cybersecurity, in particular, online financial security. Yet, as stated above, money is not actually transferred via email in an online money transfer, just the instructions to retrieve and deposit funds from participants’ physical accounts.

However, in 2019, certain studies showed that EMTs are insecure against redirections and that the platform fails to ensure the protection of its customers. There have also been a few instances where individuals have had their EMTs intercepted and money stolen. Most of these instances happened because the security questions were guessed correctly or through the impersonation of EMT customers.

It’s good practice not to accept email transfers from unknown parties, and to contact the sender directly when notified of a transfer that is not expected. Because email is used, the service is susceptible to phishing scams. Both parties must take care to ensure the safety of both the sender and receiver.

Email Money Transfer Qualifications

Pretty much any customer with an account with a Canadian bank that offers online banking can do an email money transfer. That is, most email money transfers are completed by clients of the big five banks in Canada: the Bank of Montreal, the Bank of Nova Scotia, the Canadian Imperial Bank of Commerce, the Royal Bank of Canada, and TD Bank Group, along with other financial institutions. The total number of participating financial institutions that use EMTs is 250, making it an extremely easy and prevalent service to use.