Electronic funds transfer (EFT) refers to the electronic movement of money from one bank account to another, typically via computer-based systems or telecommunications networks. It is a method used for conducting secure and convenient financial transactions between individuals, businesses, and financial institutions without the need for physical cash, paper checks, or other traditional payment methods.
In EFT, funds are transferred electronically, allowing for swift and efficient transactions that can occur in real-time or within a specified timeframe. This process involves the exchange of information and data between parties involved, such as the sender or payer, and the receiver or payee. EFT can be executed through various channels, including online and mobile banking platforms, ATMs, and card-based transactions.
EFT offers numerous advantages over traditional payment methods. It eliminates the need for physical handling and transportation of cash or checks, reducing the associated risks and costs. It also provides enhanced security measures, as funds are moved in a secure electronic environment, minimizing the potential for theft or loss during transit. Moreover, EFT allows for faster payment processing and improved cash flow management, benefiting both individuals and businesses by ensuring timely access to funds.
EFT has become an integral part of modern banking and financial systems, enabling seamless transactions, bill payments, salary deposits, and various other financial activities. Its ease of use, convenience, and efficiency have made it a preferred method of transferring funds in today's digital age, making it an essential element in the functioning of the global economy.
