EFT

Electronic Fund Transfer

A system that allows the transfer of money from one bank account to another electronically, without the need for physical money exchange or paper documentation. EFTs encompass a wide range of financial transactions facilitated through computer-based systems. These include, but are not limited to:

1. Direct Deposits: Employers use this method to deposit wages, salaries, or benefits directly into an employee’s bank account.
2. Wire Transfers: Immediate, person-to-person (P2P) funds transfer between banks or transfer services, often used for large or urgent transactions.
3. Automated Teller Machine (ATM) Transactions: Withdrawals, deposits, or transfers made through ATMs.
4. Debit Card Transactions: Purchases or payments made using a debit card directly debiting the consumer’s bank account.
5. Electronic Bill Payments: Paying bills online through a bank’s internet banking service eliminates the need for checks.
6. Automated Clearing House (ACH) Transactions: A network that processes large volumes of credit and debit transactions in batches, including payroll, direct deposit, tax refunds, and bill payments.

EFTs offer several benefits over traditional paper-based methods, such as improved efficiency, reduced processing times, and lower transaction costs. They also provide enhanced security through encryption and fraud monitoring systems, reducing the risk of theft or loss associated with cash handling and paper checks.

Leveraging EFT can streamline payment processes, enhance customer convenience, and improve cash flow management. Offering EFT as a payment option can attract customers who prefer online banking and electronic transactions, facilitating smoother transactions and potentially increasing customer satisfaction and loyalty. For businesses, EFTs can reduce the administrative burden and costs associated with managing and processing paper-based payments, allowing for more efficient operations and financial management.

• Abbreviation: EFT