EFT is an abbreviation for Electronic Funds Transfer. It is a method of transferring funds electronically from one bank account into another, therefore eliminating the requirement for individuals and companies writing, issuing or depositing cheques.
The features of Electronic Funds Transfer
Individuals and companies use electronic funds transfer to make direct payments for goods and services. It is a quick and efficient method of making secure payments. EFT can be achieved through the platform of internet banking which means that individuals or businesses are able to transfer a specific amount of money to another account of their choice without the need for any written documentation.
Although there is risk of transacting money electronically, there are a number of highly effective anti-fraud measures put in place to ensure transactions are made legally, securely and efficiently. The Electronic Funds Transfer Act (EFTA) was established in 1978 by U.S Congress in an effort to stipulate the liabilities and rights of all parties in an EFT procedure.
Companies often use electronic funds transfers in order to pay their employees their salaries. This is the most popular EFT program, which is through a Direct Deposit made by employers to pay their employees directly into their bank account. This makes the entire payment procedure efficient and secure, reducing the risk of delayed payments.
Individuals and companies that wish to utilize EFT payments are advised to seek the advice of professional consultants. This ensures that you completely understand the entire process and set up the direct deposit or payment process in a professional and timely manner.