One of the most powerful features that INTERAC e-Transfer® offers is Instant Transfer. Although the effectiveness of the platform’s fraud scoring engine means that delays imposed on recipient notifications for purposes of fraud scoring are typically 30 minutes, the use of Instant Transfer enables a notification to be sent without delay, meaning that a recipient can deposit funds immediately after they were sent. As we’ve outlined in previous posts, the ability to send and receive money instantly is the prerequisite for using digital transfers in a wider range of daily situations: at garage sales, sharing tabs among friends, and so on.
Instant Transfers are managed with Limits, the parameters within the Online Administration System (OAS) that define how much money a customer is allowed to send or receive in a single transfer, or cumulatively as “rolling limits” over one day and longer periods – typically set at 7 days and 30 days. Settings on the same screen of the OAS allow a financial institution to choose a transfer limit (both one-time and cumulatively over a 24-hour period) below which a customer will be allowed to send money as an Instant Transfer – in other words, without any fraud delay being imposed*. Another option permits Instant Transfers (up to a maximum value) in cases where the sender and receiver already have a history of transferring money between themselves – a history that is defined in terms not only of dollar amounts but also by the quantity of successful (non-defaulting) transfers. With a “behavioural history” definition that captures even senders of small amounts of money, it’s not surprising that majority of transfers today are, in fact, between senders and recipients identified as having prior histories, and who are thus eligible for Instant Transfers of higher value.
What’s more, these Limits settings are customizable by customer and by “group” – defined however the financial institution chooses – which means that a participant can use this functionality to offer a finely graduated service to its clients, weighed by criteria like per-segment fraud rates, for example, or packaged into higher-fee financial offerings.
To get full value from the service’s Instant Transfer feature, however, financial institutions should regularly review their Limits through the OAS. For one thing, when no Limit Groups have been set up customers will fall into a single “default” limit group – which means that the institution is offering a single, unvaried, vanilla service to its entire customer base. Even for institutions that have started to differentiate customers into Limit Groups, circumstances are constantly changing: transfer volumes grow and/or shift in tempo, fraud detection capabilities improve, risk tolerances change. Regular review means that at any given time, a financial institution is offering the largest-possible proportion of its customers the maximum access to Instant Transfer functionality.
In turn, it means that those customers will be transferring more money, more often, in more situations – and keeping more of their money in their accounts in order to do so. For a financial institution focused on keeping this kind of customer, “default” should be the starting point, not a permanent category.
*Instant Transfers do not result in more fraud. Our engine scores transfers that are eligible for instant notification, and if they are deemed risky, it delays them up to 30 minutes.