Electronic funds transfer (EFT) is the electronic transfer of money from one
bank account to another, either within a single
financial institution or across multiple institutions, via
computer
A computer is a machine that can be programmed to Execution (computing), carry out sequences of arithmetic or logical operations (computation) automatically. Modern digital electronic computers can perform generic sets of operations known as C ...
-based systems, without the direct intervention of bank staff.
According to the United States
Electronic Fund Transfer Act
The Electronic Fund Transfer Act was passed by the U.S. Congress in 1978 and signed by President Jimmy Carter, to establish the rights and liabilities of consumers as well as the responsibilities of all participants in electronic funds transfer a ...
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".
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
Check or cheque, may refer to:
Places
* Check, Virginia
Arts, entertainment, and media
* ''Check'' (film), a 2021 Indian Telugu-language film
* ''The Checks'' (episode), a 1996 TV episode of ''Seinfeld''
Games and sports
* Check (chess), a thr ...
" or "e-checks". In the United Kingdom, the term "bank transfer" and "bank payment" are used, in Canada, "
e-transfer" is used, while in several other European countries "
giro transfer" is the common term.
Types
EFTs include, but are not limited to:
*
Automated teller machine (ATM) transfers
*
Direct deposit
A direct deposit (or direct credit), in banking, is a deposit of money by a payer directly into a payee's bank account. Direct deposits are most commonly made by businesses in the payment of salaries and wages and for the payment of suppliers' acco ...
payment or withdrawals of funds initiated by the payer
*
Direct debit payments for which a business debits the consumer's
bank accounts for payment for goods or services
* Transfers initiated by telephone
* Transfers resulting from
credit or
debit card
A debit card, also known as a check card or bank card is a payment card that can be used in place of cash to make purchases. The term '' plastic card'' includes the above and as an identity document. These are similar to a credit card, but u ...
transactions, whether or not initiated through a
payment terminal
A payment terminal, also known as a point of sale (POS) terminal, credit card terminal, EFTPOS terminal (or by the older term as PDQ terminal which stands for "Process Data Quickly"), is a device which interfaces with payment cards to make electro ...
*
Wire transfer via an international banking network such as
SWIFT
*
Electronic bill payment in
online banking, which may be delivered by EFT or paper check
*
Instant payment
See also
*
Automated Clearing House (ACH)
*
E-commerce payment system
*
Electronic funds transfer at point of sale (EFTPOS)
*
Immediate Payment Service
*
Interbank network
An interbank network, also known as an ATM consortium or ATM network, is a computer network that enables ATM cards issued by a financial institution that is a member of the network to be used to perform ATM transactions through ATMs that belon ...
*
Payment system
*
Real time gross settlement
*
Society for Worldwide Interbank Financial Telecommunication (SWIFT)
*
Instant payment
References
External links
Electronic Funds Transfer Association
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