A cheque is an obvious way for a business to make payments to a supplier, an investor, or an employee, but it’s not often the best choice. Cheques are slow and take time to clear your account, making real-time cash flow management difficult, not to mention the risk of cheque fraud. Instead, there are many digital options that businesses can use to make payments in Canada and around the world, more securely and with faster turnaround times.
It might seem overwhelming and confusing to know which payment method to choose. We want you to make the best decision for your business, so here’s an explanation of all the payment options available for CIBC Business Banking clients.
Interac e-Transfer® for Business
Interac e-Transfer® for Business allows you to send funds up to $25,000 from your business account easily and safely to anyone with an email address, mobile phone number or Canadian bank account. This feature is available with support for multi-signatory accounts and payment approval entitlement on CIBC SmartBanking™ for Business. It costs $1.50 per transaction, but e-transfers are free for most CIBC Business Operating Accounts. Account transaction fees may apply for recipients, but they can expect payment in real time, often within an hour of the e-transfer being sent.
With Interac e-Transfer® for Business, you can future-date payments up to 100 days in advance and track payments with a unique reference number. You can cancel a transaction for $3.50, but once funds are deposited into the recipient’s account, the transaction can’t be reversed. It’s also important to note that recurring and bulk payments aren’t an option, and you can only use e-transfers in Canada.
Bottom line: Interac e-Transfer® for Business is easy, fast, and inexpensive, as long as your payments are up $25,000 or less and within Canada.
Electronic Funds Transfer (EFT) — direct deposit
An Electronic Funds Transfer (EFT), or direct deposit, provides the ability to send funds directly from your business account to suppliers and employees within Canada and is available on CIBC SmartBanking™ for Business. Payments can be made in CAD or USD with a higher maximum amount per payment than Interac e-Transfer, and also allows for recurring and bulk payments, which makes it a great option for direct deposit payroll. The cost is $2 per payment or a monthly maintenance fee, file import fee and transaction fees for bulk payments. There’s no cost for recipients except for any account activity fees they may incur.
With direct deposit, you can future-date payments up to 100 days in advance, track payments with a unique reference number, cancel a payment for $6.00, and trace a payment for $10.
Bottom line: if you’re looking to send payments of more than $25,000, recurring or bulk payments within Canada, direct deposit is the right method.
Automated Clearing House (ACH) — U.S. Dollar Cross Border Payment Service
An Automated Clearing House (ACH) acts the same way as an EFT, but for payments to the U.S. ACH allows you to send funds directly from your business account to suppliers and employees in the U.S., using CIBC SmartBanking™ for Business. Payments can be made in USD only and costs $10 per payment, after a one-time connection fee of $350. Recipients don’t pay anything to receive except for any account activity fees they may incur.
With ACH, you can future-date payments up to 100 days in advance, set up recurring and bulk payments, track payments with a unique reference number, and cancel a payment for $25.
Bottom line: if you have suppliers and employees in the U.S., you can use ACH as on option to replace cheques.
CIBC Global Money Transfer™ for Business
Send money from wherever you are and simplify your international payments by using CIBC Global Money Transfer™ for Business. You can send money through the CIBC Mobile Banking App® or CIBC Online Banking for Business®. You can send up to $80,000 to over 120 countries in the recipients’ local currency to pay suppliers, pay employees, and manage your business. There’s no cost to send except for foreign exchange rates, and you’ll always get preferred rates as a CIBC Business Banking client. On the recipients’ side, they’ll only pay fees their local banks might charge for account activity, and the processing time is typically within 1 day.
With CIBC Global Money Transfer™ for Business, you can set up recurring payments, and track all payments with a unique reference number. There’s no cost to cancel payments. However, bulk payments and future-dated payments are not an option.
Bottom line: if you have international business needs or even one-time payments outside of Canada up to $80,000, CIBC Global Money Transfer™ for Business provides a low-cost, fast service to send money to over 120 countries.
Wire payments let you send money anywhere in the world in any major currency, through CIBC SmartBanking™ for Business. The cost is $20 to send, $15 to receive, and $35 to cancel per transaction, but wire payments offer the ability to send larger payments, recurring payments, bulk payments, and future-dated payments. Sending wire payments through SmartBanking saves you the time of visiting the banking centre, but also saves you money as the cost to send payments through the banking centre is much higher. Wire payments are also fully traceable with a unique reference number and usually process within 2 business days.
Bottom line: if you want to send larger payments worldwide, or you want to make recurring or future-dated payments, wire payments is the best option.
Other payment options
A summary of all available payment options wouldn’t be complete without mentioning your CIBC business credit card. As with personal credit cards, you can use your business card to buy supplies and pay invoices anywhere in the world at no cost except for your annual fee and monthly interest rates, if applicable. You can even set up recurring payments to utilities and phone and cable companies, all while potentially earning rewards. Using a credit card can also be an effective way of managing your business expenses, but you have to keep your credit limit in mind for every payment and manage your cash flow to pay your balance at the end of each statement period.
Bottom line: a credit card is a great cash management tool that can even earn you some rewards and might be the best option for some payments.
For more information, read a comparison of each business payment method (PDF, 225 KB) Opens in a new window..
To create a tailored plan for your business needs and help you achieve your goals, meet with us opens in a new window. We’re here to help. Talk to a CIBC Business Advisor today by calling 1-866-992-7223 Opens your phone app..