What is Electronic Funds Transfer (EFT) | chargebackhit.com

Electronic Funds Transfer (EFT)


An electronic funds transfer (EFT), or electronic payment, refers to the digital transfer of money from one bank account to another. This payment method enables individuals, banks, and companies to efficiently transfer funds, make bill payments, send money to friends and family, and compensate employees on paydays.

EFT payments offer a faster and more convenient alternative to traditional payment methods such as cash and checks. Various types of transactions fall under EFT, including direct deposit, credit card transactions, ATM transactions, electronic checks, and phone payments.

When you make an EFT payment or transfer, you use technology to move money between your bank accounts electronically. For example, if you have used online banking to transfer funds from your checking to your savings account, you have engaged in an EFT transaction. Similarly, using a smartphone app to send money to a friend to cover a restaurant bill also involves EFT technology.

EFT payments provide enhanced security and efficiency compared to paper-based payment methods like checks. They eliminate the need for physical documents, reduce the risk of loss or theft, and streamline the payment process for both individuals and businesses.