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Electronic funds transfer (EFT) is the transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems.
The funds transfer process generally consists of a series of electronic messages sent between financial institutions directing each to make the debit and credit accounting entries necessary to complete the transaction. An electronic funds transfer starts when the sending customer send an electronic instruction with the purpose of making payment to the beneficiary or the receiving customer.[1]
Process
According to the United States Electronic Fund Transfer Act of 1978 it is "a funds transfer initiated through an electronic terminal, telephone, computer (including on-line banking) or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account".[2]
Funds Transfer example
EFT transactions are known by a number of names across countries and different payment systems. For example, in the United States, they may be referred to as "electronic checks" or "e-checks". In the United Kingdom, the term "BACS Payment", "bank transfer" and "bank payment" are used, in Canada, "e-Transfer" is used, while in several European countries "giro transfer" is the common term.
GiroApp
Types
ATM
Electronic Funds Transfer (EFT) is an umbrella term that refers to a number of different transfer methods:[2]
Automated Clearing House (ACH) payments processed through the ACH network and not through traditional card networks. Not all EFT payments are processed through the ACH network, but all ACH payments are EFTs
