Introduction to Electronic Funds Transfer (EFT)
Electronic Funds Transfer (EFT) is the process by which a user of one bank can transfer money from their account to another by way of payment. It is also called a direct deposit since it directly deposits money into the receiver’s account without the need for any physicality like documents and cheques, and for its accessibility.
Understanding Electronic Funds Transfer (EFT)
ETFs work via electronic signals that the sender generates when initiating sending money to the receiver. Instantly the networks and the servers or payment terminals receive the signals to initiate and continue with the payment. The receiver and the sender can be many parties like employers to their employees, vendors to customers, retailers, etc. The reason why ETFs are so popular is because of how accessible they are while ensuring safety of the transaction. They’re also very swift, with the money being credited almost instantly or within a window of a few days. ETF is possible by initiating a digital cheque — usually between vendors and retailers during the purchase, direct deposit and phone payments — for utility payments, ATMs and card payments or internet transactions via proper authorization. ETFs are encrypted across 128-bit signals, ensuring security. As such, they are secure and swift, and cost effective for businesses. It requires very little effort to set up, usually requiring a bank account and proper documents to allow transfers at the time of set-up only. During the transfer, there is no necessity of providing documents or physical presence to initiate the transaction.
Highlights of Electronic Funds Transfer (EFT)
- Usually a very small fee is charged to process the payment across a window, and in large amounts during transfer.
- To make an EFT payment, all you need is your bank information and the receiver’s bank information.
- You cannot stop an ETF payment after you’ve initiated it by clicking continue after entering your bank details.
