An electronic funds transfer or EFT, is a system for transferring money from one bank to another electronically. Transferring funds electronically has become commonplace and widespread since the arrival of personal computers, improved cryptography and the internet.
Direct deposit is the most common electronic funds transfer method that there is. It is used by employers for depositing the salaries of their employees directly into their bank accounts. Another common type of EFT is the automatic charge that is made to you savings or checking account. For example, when you are making a mortgage payment, the bank will automatically take the monthly payment from the bank account you have authorized them to use. You are not required to do anything each month as it is all automated. By accepting an EFT payment or Electronic Funds Transfer from customers, companies can reduce the amount of time that they spend chasing invoices and trying to collect payments. These businesses can much more easily accept recurring transactions as well as make the lives of their customers much simpler. By using EFT payments, both the company and their customers come out ahead in many ways.
Electronic funds transfers can be used by all businesses who accept recurring payments. EFT payments are the ideal solution for charities who accept donations. EFTs eliminate late payments and reduces the expenses that are associated with mailing out invoices and collecting payments. Customers no longer have to concern themselves with writing and mailing checks nor worry about incurring late fees. EFT’s are a prime example of the wonders of an open market economy.
Echecks are another way for people to do business electronically. An eCheck is simply an electronic version of the paper check. Many people who do not have credit cards or who do not have sufficient credit are turning to Echecks for easily and securely paying for goods and services. Businesses who accept eChecks allow their customers to authorize money to be taken from a bank account by submitting the routing number and the bank account number. It is a quick and relatively low risk manner of accepting and making payments online.
Savvy online business owners are incorporating eCheck payment options into their websites in order to gain more customers. It is quite easy for online businesses to set their payment options to include the acceptance of eChecks. By doing so they are putting themselves ahead of their competitors who have yet to accept this type of payment.
Source by Caitlina Fuller