All you ought to know about EFT payments
There are indeed several situations when you would want a quick transfer of funds from your account to that of others. It applies to business transactions as well as personal requirements. It could be something like sending money to family back home, paying your tuition or examination fee, etc. With the widespread use of the internet and the growth of online businesses, there is all the more necessary for quick transfer of funds. Also, you must be able to pay your employees or clients who are spread across the world. There is also a need to pay them in various currencies. EFT payments are meant to address all these issues efficiently.
EFT- What is it?
EFT refers to Electronic Fund Transfer. It is a financial transaction that takes place over a computerized network. You can initiate a transfer of funds either between accounts within the same bank. There is also scope for transfer between accounts held in different financial institutions. The best examples for EFT include direct debit transactions, online bill pay services, and direct deposits which you might be familiar with and would even be using regularly. You can gain complete knowledge about online transactions by considering EFT vs ACH vs Wire all of which have their own set of pros and cons. But, remember that ETF is an umbrella term that includes ACH payments and wire transfers as well.
How does EFT work?
You no longer need to deal with physical cash. It is because you can make transactions online on any computer or advice that has internet access. The transfer of funds happens via the exchange of data that represents your money. This leads to a paper-free banking system because payment and transfers happen over digital networks.
Uses of Electronic Funds Transfer
Credit or debit card
This refers to transferring money to the seller from the buyer’s account, electronically. It is a popular form of Payment due to its flexibility as well as convenience.
Online bill payments
It is again a convenient method that can help settle your monthly bills in electronic format. It offers scope for you to pay through multiple devices that have internet connections like mobile phones, laptops, desktops, etc. it allows you to pay from anywhere in the world.
This refers to the payment of salary income to employees by the employer. This will make the process quicker and help save time and costs involved in writing and delivering checks manually.
This refers to the Auto-draft that individuals and organizations configure to ensure timely payment of recurring transactions. In this case, the customer would have to instruct the bank to automatically transfer a certain fixed amount for monthly service bill recurring deposits, etc.
Benefits of EFT
The benefits are very simple. It is easy, cheap and quick. The other benefits include
• Saving costs on printing, checks, delivering checks, and depositing them in banks for processing
• It is an efficient system that is error-free most of the times
• It will help reduce administrative costs. You can reduce labor and staff costs.
• It is safe and secure. It reduces the risk involved in carrying huge amounts of money from one bank to another.
The process is efficient owing to the advanced technology and there is no doubt that it can make your life stress-free. Getting to know the distinguishing features of EFT vs ACH vs Wire will help you understand the system of money transfer and use it effectively.
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