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Electronic Fund Transfer
Electronic Fund Transfer
Electronic Funds Transfer (EFT) is a system of transferring money from one bank account directly to another without any paper money changing hands. One of the most widely-used EFT programs is Direct Deposit, in which payroll is deposited straight into an employee's bank account, although EFT refers to any transfer of funds initiated through an electronic terminal, including credit card, ATM, Fedwire, and point-of-sale (POS) transactions. It is used for both credit transfers, such as payroll payments, and for debit transfers, such as mortgage payments.
Earlier Article: Mobile Commerce (M-com)
Electronic Funds Transfer (EFT) represents the way the business can receive direct deposit of all payments from the financial institution to the company bank account. Once the user Signs Up, Money Comes to him directly and sooner than ever before. EFT is fast, safe, and means that the money will be confirmed in user’s bank account quicker than if he had to wait for the mail, deposit the cheque, and wait for the funds to become available.
The growing popularity of EFT for online bill payment is paving the way for a paperless universe where checks, stamps, envelopes, and paper bills are obsolete. The benefits of EFT include reduced administrative costs, increased efficiency, simplified bookkeeping, and greater security. However, the number of companies who send and receive bills through the Internet is still relatively small.
The payment mechanism moves money between accounts in a fast, paperless way. These are some examples of EFT systems in operation:
Automated Teller Machines (ATMs)
Consumers can do their banking without the assistance of a teller, or to make deposits, pay bills, or transfer funds from one account to another electronically. These machines are used with a debit or EFT card and a code, which is often called a personal identification number or “PIN.”
Point-of-Sale (PoS) Transactions
Some debit or EFT cards (sometimes referred to as check cards) can be used when shopping to allow the transfer of funds from the consumer’s account to the merchant’s. To pay for a purchase, the consumer presents an EFT card instead of a cheque or cash. Money is taken out of the consumer’s account and put into the merchant’s account electronically.
Preauthorized Transfers
This is a method of automatically depositing to or withdrawing funds from an individual’s account, when the account holder authorizes the bank or a third party (such as an employer) to do so. For example, consumers can authorize direct electronic deposit of wages, social security, or dividend payments to their accounts. Or they can authorize financial institutions to make regular, ongoing payments of insurance, mortgage, utility, or other bills.
Telephone Transfers
Consumers can transfer funds from one account to another through telephone instructions rather than traditional written authorization or instrument.The accounts being debited can be checking or savings, for example or can order payment of specific bills by phone.
Well, that's all on EFT. With this article, we have concluded our topic of Networking And Telecommunications. For a list of topics we have dealt in on the course of this journey, click here.
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