TORONTO — Wealthsimple Inc. has unveiled its first credit card and a line of credit as a strategic move to challenge the market dominance of Canada's major banks. The announcement was made on Wednesday, marking the company's continued expansion into a broader financial services landscape.
This expansion includes the introduction of mobile cheque deposits, wire transfers, and bank drafts to its chequing account, which was initially launched in 2020. Wealthsimple is keen on providing a more comprehensive financial suite akin to that of traditional banks.
Despite these advancements, Wealthsimple has consistently stated that it does not aspire to become a full-fledged bank. Chief Commercial Officer Paul Teshima reiterated this stance, explaining that the absence of a banking license allows Wealthsimple to explore unique and innovative financial solutions. He highlighted the partnership with ten banks to safeguard clients’ deposits, which ensures Canada Deposit Insurance Corporation coverage of up to $1 million as a significant advantage.
Wealthsimple’s latest offerings include a credit card that features a two percent cash back incentive and a line of credit expected to have interest rates starting as low as 4.45% when it launches by the end of the year, notably lower than the current prime rate of 4.95%. Additionally, clients can have bank drafts delivered free of charge to recipients, and can utilize their Wealthsimple account balances as collateral for lines of credit.
However, the challenge remains regarding how much market share Wealthsimple can capture from the Big Six banks in Canada, which encompass RBC, TD, BMO, CIBC, Scotiabank, and National Bank. These institutions dominate the market, controlling over 90% of bank assets under management. Canadians have historically been hesitant to switch from their preferred banking institutions, complicating Wealthsimple's competition strategy.
Teshima cited a survey conducted by Wealthsimple with Angus Reid, revealing that a quarter of respondents expressed dissatisfaction with the existing banking system. Furthermore, 38% of those surveyed had contemplated leaving their primary bank in the past year, suggesting a potential appetite for alternatives to traditional banking services.
Wealthsimple has already successfully attracted users away from conventional retirement accounts, an area that some analysts doubted would be feasible. Teshima emphasized that through substantial investments in technology and a focus on client experience, Wealthsimple has streamlined the transfer process, mirroring this strategy with its chequing account offerings.
The anticipated demand for Wealthsimple's credit card has already been evident, with it being the most requested product from clients during its preliminary testing phases over the past year. The company has also seen significant interest in its combined spending and savings account, with approximately a quarter of its over three million customer base enrolled in this feature.
The surge in activity within higher-interest accounts has been notable in recent years, particularly as rates climbed above four percent. Teshima indicated that even as interest rates decrease, there is still a strong demand for these accounts. He stated, “When we launched our high interest chequing account, it was a huge driver of new clients and deposits for us in the billions.” The ongoing interest in high-yield options remains significant to their overall client satisfaction.
“Chequing is the foundation, but then you can quickly move it seamlessly to wherever you want to get a higher yield, is the beauty of having sort of one platform together,” Teshima remarked, highlighting the cohesive design of Wealthsimple’s financial services.
This report was first published on June 11, 2025. Ian Bickis
