For many Canadians, sending money overseas is simply part of everyday life and a mainstay in the monthly budget. The majority of Canadians (56%) need to transfer money overseas at some stage, according to recent survey data. Yet, more than three quarters of Canadian adults report that sending a large sum of money makes them feel nervous. So what’s behind all that anxiety? To find out, we asked 1,200 Canadian adults.
Canadian international money transfer habits
Before we examine why sending money makes people nervous, let’s look at why we send money overseas.
The most common reason Canadians use international money transfers is to send money to family and friends (22.75%). Canadians sent a whopping $5.2 billion in remittances alone in 2017. Supporting travelling family members is the next most common reason for international money transfers, with 11.50% of Canadians offering this kind of support. It could be that Canadians are travelling to visit overseas family and friends, or that parents are footing the bill so their children can have the perfect travel experience.
Moving overseas is another major contributor to money transfer use. 7.25% of survey respondents in Canada said they had used or will use money transfers to move overseas. Data also suggests there were approximately 2.8 million Canadians living abroad as of 2006, all who likely used money transfer services and might do so again if they return.
Almost 6% of Canadians use international money transfers to buy an overseas property or to pay for overseas mortgage payments, while almost 3% said they needed to pay taxes overseas, and almost 3% to pay for overseas tuition fees.
There was also a significant portion (19.42%) who said they use, or will use, money transfers for other reasons.
For some people, international transfers are more of a one-off. Purchases like buying an overseas car or boat and paying for an international wedding were much lesson common, at just 2.08% and 2.42%, respectively. Interestingly, despite just 2.42% of Canadians overall saying they’d use a transfer to pay for an overseas wedding, this number shot up to 12.77% for young people aged 18-24.
The cost of running a business
A small proportion of Canadians are also using money transfers to support running a business. 2.67% said they have or will use transfers to run an ecommerce store and a further 2.42% to start a company overseas. Just 1.92% of Canadians say they would use money transfers to pay an overseas business payroll – but given one employer could be paying multiple staff members this could mean a lot of individual transactions.
Why are Canadians nervous about sending money overseas?
Have you ever felt a pang of anxiety the moment you’ve clicked “send” for a big overseas transaction? You’ve checked the numbers – maybe even twice – but you can’t help but think “what if”. You’re not alone. 22.8 million Canadian adults (76.33%) say the thought of sending $10,000 or more overseas makes them nervous.
Human error the biggest concern
A huge number of Canadians worry about sending their money to the wrong account. 10.5 million Canadian adults, or 35%, say that’s why it makes them nervous.
While it is possible to reclaim cash sent to the wrong account, it’s not easily done. If an error is made, you need to contact the bank as soon as possible, and even then, there’s no guarantee the funds would be returned. No wonder we get stressed! If you do manage to retrieve the funds, the money could take some time to return to your bank account. While this might not matter for those with time on their side, it could be an inconvenience or potential disaster if you’re in a rush to access the money. We feel nervous just thinking about it!
Confusion around tax laws and regulation
A third (29.17%) of Canadians say they’re nervous because they don’t really understand the tax laws and regulations involved. The concerns aren’t unfounded. For instance, if you’re sending more than $10,000 to a US bank account, the receiver would need to declare the transaction to the US Government. Failing to do so could land you in hot water with the IRS.
Tax and regulations do vary depending on where you’re sending the money and it’s important to always check with local regulatory bodies before you hit send. In saying that, if you’re transferring your own money to another account in your name, you usually won’t have to pay tax. If you’re transferring money for any other reason, like an inheritance, or a gift to a family member, the money you’re sending could be subject to tax and regulations.
You can read about the different tax and regulations applicable to the country you’re sending money to on Finder.
Excessive fees makes the list
Nearly a third of respondents (27%) say sending large sums overseas makes them nervous because they think the fees are too expensive. While this might have been true of transfers years ago, the market has changed a lot in recent years. However, given the range of different fee structures, it’s easy to feel like you’re going to be stung with hidden fees. No one likes paying money they don’t have to, but many providers are super transparent about what’s involved and now offer transfers with no fees or at a fixed rate. This means it wouldn’t matter if you sent $10 or $10,000 – you would always receive the same rate. However, offers do vary, so it’s best to compare your options before committing to a provider.
The waiting game
10.25% of respondents said overseas transfers make them nervous because of the time it takes for the money to appear in the receiving account and potential lost interest on the cash while they wait. If you’re holding off on transferring money for this reason, it’s worth remembering that you often stand to lose more by not transferring your funds into an account with a higher interest rate.
Not only that, but transfer providers are able to send money faster than ever before. Gone are the days of waiting weeks on end for the money to land in your account. With dedicated transfer services and the rise of digital-only banks, it’s possible to send large sums of money and receive it within a day or two. Some providers can even make a transfer within just a few hours!
17.67% of respondents said sending large sums of money overseas would make them nervous, but they couldn’t say why. Sometimes it’s just the possibility that something could go wrong rather than the probability that anything specific will.
1% of Canadian adults said they would be nervous for other reasons. Some people cited the forex rate while others said a lack of transparency. A few respondents mentioned anti-money laundering concerns, saying the checks and regulations in place could delay their money from being delivered on time.
Women more nervous than men, young people more cautious than older generations
Women are more likely to feel the nervous jitters before sending money overseas. 80% of women in the survey said sending money overseas would make them nervous, compared to just 72% of men – a difference of 8%.
Despite young people being coined the “tech” generation, they were actually more cautious than any other age group – especially people aged 65+. A whopping 94% of those aged 18-24 were nervous at the thought of sending large sums overseas, compared to just 68% of Canadians aged 65 and over.