Wealthsimple launch highlights
Why now, Wealthsimple?
At what felt like an Apple product launch, with a live event (at Toronto’s Evergreen Brick Works) and streaming to over 110,000 Canadians, Wealthsimple announced a new credit card and chequing account, both under a campaign called “The End of Banking?” It’s clear that the move is to compete against Canada’s big banks.
Wealthsimple tells MoneySense that its current clients wanted expanded services, and financial products that they used, well, elsewhere. Here are some of its recent survey results.
83% of Canadians have accounts and/or products at one of Canada’s Big Five banks (BMO, CIBC, RBC, Scotiabank and TD), and 38% of them have considered leaving in the past year.
25% are dissatisfied with the current Canadian banking system, with 14% reporting outdated physical and digital experiences.
38% of Canadians paid hidden or unexpected banking fees.
28% polled suggest physical branches will disappear within 10 years.
According to Paul Teshima, chief commercial officer at Wealthsimple, having a chequing account at the fintech means a “faster delivery of movement of money. We’ve always, within our own ecosystem, allowed for fast movement of money, with no limits, no fees.” He adds: “The (transferring of money) issue is more prevalent across the industry, where banks will charge a transfer fee if you want to move money from, say, your retirement account or your TFSA to another institution like us. They charge up to $150 for every account you transfer.” He calls this “a tax on choice.”
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Is Wealthsimple’s new credit card worth applying for?
First of all, you can’t apply for it right away. Like the launch of Wealthsimple’s first home savings account (FHSA) and other financial products, you have to sign up for a waitlist, which happened with the soft launch of the card in April. (Could be part buzz-building and part onboarding management.) The waitlist has since opened up again 20,000 cards.
Second, Wealthsimple’s card is a Visa Infinite card, and it promises to be competitive, and so far, so good. Its cash back rewards are dead simple: 2% on all purchases. No tiers, categories or complicated charts.
As for redeeming the moolah, the rewards are credited to your Wealthsimple Chequing account within seven days of your statement date, and the Wealthsimple app will notify you.
MoneySense editor notes:
Cash back rewards Earn 2% on all purchases; no categories, limits, nor spending caps.Annual fee$120, broken down into monthly payments, which can be waived for clients with $100,000 in other Wealthsimple products/accounts, or qualifying deposits of $4,000 a month.Interest rate20.99%Foreign exchange No FX fee, which is typically 2.5% of an international purchase.Tap limitNo tap limit amount.
What is the Wealthsimple Chequing account?
Formerly known as Wealthsimple Cash, Wealthsimple Chequing allows clients to earn 1% in cash back rewards on all purchases using a prepaid Mastercard. And it offers access to direct-deposited paycheque funds a day early, as well as 0.5% interest on your total account balance when qualifying direct deposits are set up.
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