CIBC axes fees to send money overseas from Canada

CIBC is eliminating fees for sending money overseas after developing new technology that makes it faster and easier to send international remittances.

Beginning Friday, customers with CIBC accounts will be able to send money to 34 countries without paying upfront fees, the bank announced Thursday morning. Remittances can be sent online or from a CIBCbranch.

Those upfront fees can range from $25 to $50 per remittance, with distributors throughout the process adding to the cost so customers might spend up to $150 to send $1,000 to relatives overseas, according to Vineet Malhotra, head of alternate and retail solutions at CIBC.

Malhotra says new technology, and 10 months of negotiations with transfer agents in 34 countries, has made it possible for the bank to eliminate fees.

"You won't have these distributaries taking out fees along the way. Whatever you sent is what will be received by the recipient," he told CBC News.

Malhotra said the bank is cultivating newcomer and immigrant customers, who send about $30 billion a year in international remittances, according to World Bank figures.

"The newcomer market is so important. When you think about the newcomer and immigrant population about seven million Canadians are either immigrants or newcomers," he said.

Growing market

Providing an easy, no-fee solution to a need they may have in the first years they are living in Canada can help build a long-term relationship, Malhotra said.

People need to send money overseas to support family, continue their business operations and maintain property.

"For us as a bank, we want to grow with those clients. This is an important piece of the equation in banking those clients and building a healthy long-term relationship with them and making something easy for them," he said.

He said CIBC is "disrupting the market" and he expects other banks and financial institutions will have to scramble to catch up.

The 34 countries to be served represent about 80 per cent of remittances from Canada. CIBC plans to offer no-feetransfers to 60 countries by the end of next year.

India and the Philippines, two of the most common destinations for money transfers from Canada, are among the first batch of countries for the no-fee service, along with the U.K., Greece, Hong Kong and Italy.

CIBC Global Money Transfer service allows daily transfers of up to $2,999.99 via online banking and up to $9,999.99 from the branch.

CIBC is promising most transfers will be received by the recipient within one business day.