An electronic fund transfer (EFT) is initiated by the account owner to send funds to their recipient using various methods. Not so long ago, we were limited to using banking institutions for such transactions. With more financial institutions such as that of credit card unions, we can pay using an EFT transaction even through a bank’s ATM.
The advantages of the worldwide network for financial transactions is enormous. We now have a global economy that booms due to the ease of payment methods. The power to make purchases from the other side of the world is at the tip of your fingertips.
What sparked explorers to travel far was for trade. These voyagers sought items such as silk and tea. Now, the trade routes are established with not just ships but also cargo plans and other forms of transport. Purchases from a faraway place can now be made by an individual by making a payment transaction online.
International payment systems
When we send international payments or a remittance, the traditional method is that of a bank-to-bank transaction. This EFT is done via the Automated Clearing House (ACH) network. All of the financial institutions in the US are connected via ACH. When the person authorizes the money transfer, the amount will be debited from their bank account to be credited to the recipient’s bank account.
Like a bank teller
You might have experienced waiting in line at a bank’s teller. No matter how fast the teller is at doing their tasks, it will seem like they take forever. It is much faster to make an EFT using a bank’s ATM. These machines can be used for balance inquiries, deposits, withdrawals, transferring funds, and much more.
For bills payments
Bills payments using an ATM are also EFT transactions. If you are using a mobile app to make a payment or to receive funds, those also are electronic funds transfers. Take note that even wire transfers are electronically done.
Secure payment systems
Most of our payments are made using an electronic payment system. Even when we shop online using our credit cards, there is still that network that will be tapped electronically for the funds to be moved from your account to the one that you bought from.
Types of EFT payments
The other types of EFT payments include direct deposit, electronic checks, and debit cards. As our technology improves and financial institutions come up with advanced payment solutions, we can expect more types of EFT payments.
Fast payment transactions
When we use cash, it takes a few minutes of our time. When the retailer has the option for the client to make an EFT payment, the transaction can be completed in a minute. The owner would save a lot of money as accepting EFT payments would greatly reduce the need for manpower. The speed of the transaction will also get rid of having to wait in lines that nobody likes.
Speedy EFT payment transactions that can be done internationally will surely further boost the booming global economy.