Cisco CloudCenter: Get the Hybrid IT Advantage

Electronic Funds Transfer System (EFTS)

Definition - What does Electronic Funds Transfer System (EFTS) mean?

An electronic funds transfer system (EFTS) is a transfer system in which money can be transferred to business or individual accounts without requiring paper money to change hands. Electronic funds transfer systems are used for payroll payments, debit or credit transfers, mortgage payments or other payments. Due to its benefits, electronic funds transfer systems are promoted by most financial institutions.

Techopedia explains Electronic Funds Transfer System (EFTS)

An electronic funds transfer system functions similarly to that of a debit card system. In all transaction cases, the payer needs to be enrolled for the electronic funds transfer system and should ensure the necessary credit in their accounts. The process in electronic funds transfer system involves the payer initiating the electronic funds transfer. Depending on the type of transfer, the Automated Clearing House debits the amount from the payer and instructs for credit to the payee. The credit to the payee depends on the payee’s bank back-end processes. In most cases, funds transfers in electronic funds transfer system take up to three days. Automated payment to the payee is also possible through electronic funds transfer systems.

An electronic funds transfer system ensures that administrative costs are less as the direct intervention of bank staff is not required, and thus the cost savings is greater. It also simplifies the bookkeeping and increases much-needed accuracy. The transaction history is readily available to all parties involved at all times. Another benefit is that an electronic funds transfer system provides great security and protection to the funds.

Share this:

Connect with us

Email Newsletter

Join thousands of others with our weekly newsletter

The 4th Era of IT Infrastructure: Superconverged Systems
The 4th Era of IT Infrastructure: Superconverged Systems:
Learn the benefits and limitations of the 3 generations of IT infrastructure – siloed, converged and hyperconverged – and discover how the 4th...
Approaches and Benefits of Network Virtualization
Approaches and Benefits of Network Virtualization:
Businesses today aspire to achieve a software-defined datacenter (SDDC) to enhance business agility and reduce operational complexity. However, the...
Free E-Book: Public Cloud Guide
Free E-Book: Public Cloud Guide:
This white paper is for leaders of Operations, Engineering, or Infrastructure teams who are creating or executing an IT roadmap.
Free Tool: Virtual Health Monitor
Free Tool: Virtual Health Monitor:
Virtual Health Monitor is a free virtualization monitoring and reporting tool for VMware, Hyper-V, RHEV, and XenServer environments.
Free 30 Day Trial – Turbonomic
Free 30 Day Trial – Turbonomic:
Turbonomic delivers an autonomic platform where virtual and cloud environments self-manage in real-time to assure application performance.