Different forms of electronic funds transfers – how do they work
Electronic fund transfers (EFT) moves funds from one financial account to another. These accounts may belong to the same institution or two different ones. An EFT transaction is also known as electronic banking. These types of paperless transactions are done electronically via a computerized network.
Automated Clearing House network
The processing of EFT payments is via the Automated Clearing House (ACH) network. This network connects all the US-based financial institutions such as banks and credit card companies. Due to the network, a person may authorize the transfer of the funds that will be debited from their account and credited to another account.
There are different forms of electronic funds transfer which are as follows:
Automatic Teller Machine (ATM). Launched in the 60s, ATMs then were only capable of a few EFT transactions such as withdrawals and deposits. Many of a bank tellers task can be done with the use of an ATM, which works even after banking hours. Nowadays, may ATMs provide you with the option to make bills payments.
Wire transfers. This fund transfer type is either domestic or international using banking institutions or money transfer service companies. A wire transfer can send funds from person to person or from one bank account to another.
Direct deposit. This type of funds transfer is commonly used for paying employees. The salary amount is debited from the employer’s bank account to be credited to the employee’s account on payday. It is also an option to use direct deposits using ATMs that accept cash deposits.
Electronic checks. Also known as e-checks, these are issued by you using your banking systems. To be able to use an electronic check for a payment transaction, you have to provide certain information such as your bank account number, the name of the institution or person you will pay, and the payment amount.
Debit cards. These prepaid cards may be used for EFT transactions. Money from a debit card can be funded from your bank accounts and vice-versa. Debit cards are also commonly liked to a mobile payment app so it is easier to use for purchases and bills payments.
Money services app
EFT transactions make it possible for us to have a cashless society. With the use of your mobile devices, it is much easier to make an EFT transaction such as sending money internationally via wire transfer. You can have the capacity to send money using most of the different forms of EFT when you have the right money services company’s app.
Our mobile devices make it so easy to send and receive funds. When we use an app to make payments, we are in control of our finances as we get to see what happens to our funds in real-time. With a few taps, forms are filled, and the advanced payment solutions make us capable of using the traditional EFT methods and more, such as that of peer-to-peer transactions.
As the payment system infrastructure becomes wider and our internet gets stronger, we will have more cashless transactions. Save time, money, and effort when making local and international EFT transactions when you use the right money services company’s app.