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rob carrick

Tell me if I'm an unsentimental lout.

A little while ago, I sent a cash wedding gift to my cousin by e-mail. What, a cheque is more personal?

At the wedding reception, there was a basket on a table for people to drop envelopes that would soon be ripped open and then thrown out. The cheques inside would be piled up and then cashed at some undetermined future date.

E-mail money transfer is the better way. Using Interac Email Money Transfer, it took me all of about 20 seconds to send the money, and it cost me nothing beyond the amount of the gift.

To start, I logged into my online banking website, clicked on the Interac e-mail link and quickly filled in the amount to be sent and the e-mail address of the recipient. There's also space to write a message - no need for a gift card - and a security question that the recipient must answer to complete the transaction.

Ever send a cheque to someone and they don't cash it for weeks? For small amounts, it's no big deal. But for wedding present-size amounts, it's nice to have the cheque clear quickly. With Interac e-mail, the money comes right out of your account and is transferred to the recipient as soon as he or she opens a notification e-mail and follows a few simple steps.

Quick and Painless

First, the recipient picks his or her bank from a list of financial institutions. She's then sent to her bank's website, where she logs in, answers the security question and completes the deposit. With the money e-mail I sent,  a confirmation e-mail told me the gift was deposited a few hours after it was sent.

Note that 24 banks and credit unions offer Interac e-mail money transfers. The transfers work best if the recipient's bank is in the group as well. If not, the transfer takes three to five days and a fee is deducted.

At our house, cheque-writing has largely dwindled down to payment to our boys' schools for the milk program, pizza days, various field trips, activity fees and supplies. We haven't paid a bill with a cheque since the 1990s, and payments for most everything else (hockey league fees, summer camps, magazine subscriptions) have gone online.

Cheque-writing has declined sharply in the past decade, according to the Canadian Payments Association. In 2009, 935 million cheques were cleared through the Automated Clearing and Settlement System, down from 1.4 billion in 2000.

Research commissioned by Interac, a non-profit group that operates the country's main bank machine and debit network, shows that use of cheques is a generational thing. In a survey last fall, 61 per cent of people between the ages of 18 and 29 said they used cheques, compared to 77 per cent for people 30 to 49 and 80 per cent for those aged 50 and up.

Eliminating Cheques

Cheques in more or less modern form have been around for about 300 years - is it time they were phased out? In Britain, a target date of 2018 has been set for the elimination of cheques, but only if suitable replacements can be found.

Here in Canada, Interac's e-mail money transfer service has been around since 2002. Some 10.7 million money transfers were processed last year, up from 4 million in 2006. And yet, the buzz factor on e-mail money transfers is minimal.

Cost may be a factor. Some banks have a banking service package that includes one or two of these transactions per month, but otherwise you'll pay $1.50. That's just enough to be prohibitive.

A free alternative has just arrived in the form of the e-mail money transfers being offered through ING Direct's new Thrive no-fee chequing account. ING seems motivated to wean people away from cheques, which are costly to process. The bank provides clients with a book of 20 cheques at no cost and then charges $10 for each subsequent book of 20.

ING's e-mail money transfers work much like Interac's system in that you set up a security question for the recipient to answer before making the deposit. If the recipient is an ING client, he or she can instantly deposit the transfer. If not, there's a delay of one to two days.

Market research by Interac suggests that if I'm a lout for e-mailing a gift of cash, at least I'm not alone. Asked why they use e-mail money transfers, 26 per cent of respondents said it was to send a gift. Other uses included sending money to kids at university and repaying a debt. Now, if only schools would start taking e-mail money transfers.

Bye-Bye, Cheques

Interac asked people what they use its e-mail money transfer service for:

• To send money to a relative in need, e.g. child in university: 42%

• To pay back someone they owe money to: 40%

• Monetary gifts: 26%

• Membership fees, e.g. gym membership, clubs or associations: 25%

• One-time projects or events, e.g. home renovation or wedding: 19%

• Payments to people who provide services, e.g. babysitter or gardener: 18%

Vote on Rob Carrick's Facebook fan page (Rob Carrick - Personal Finance): Is it socially acceptable to send a gift of cash using an e-mail money transfer instead of a cheque?

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