How Electronic Funds Transfer Works
Electronic Funds Transfers emerged as one of the most needed technology in the world. Funds transfers through cash paid by hands are less effective, not secured, and time consuming. EFT emerged quickly and now practicing all over all the world by each and every organizations and even every single person is now involved in it.
Cash or check payment system between two persons or organizations were slow process, not much secure and cost more than EFT. EFT costs only few cents in comparison with check which costs in $1 to $2. It enhanced the purchasing powers of people who once not able to buy products outside the city or country through check because of inability of acceptance or delay process.
Electronic funds transfer through person accounts to other person account emerged very rapidly and it done in the form of credit cards, debit cards issued by the banks or other financial institutions. Card system is very effective which allow person to keep it and used it through easy process. Cards having magnetic chip which saves all the records of people of account holders all over the world. These cards are just swipe through an electronic machine and few digits cards numbers are entered and just that’s all, the transactions completed and funds transfer through just easy step. Companies like Visa and Master issued such cards which includes the person name and security key. These cards issuing companies keep records of all cardholders in a long database and ensure that the right person is using such cards through safely security measures. Some other person misusing cards will be blocked and cards will be no available in use before the proper verifications.
Banks or other financial institutions within a country or over the world are linked with each others uses the facility of electronic funds transfer which allows them to easily transfer cash from one source to another. These financial institutions also allow customers to transfer their accounts funds to another account within just seconds. Banks issued security keys to account holders to access their transactions electronically and also print these transactions on a paper.
Transactions of electronic funds transfer occurs through Wire Transfer which is direct transfer outside the country from account to account, through exchange companies who easily provides or even free of costs account opening facility and deduct just few dollars for transactions. PayPal is one such example which provides multiple facilities to its customers over the world. PayPal electronic services also received payments on the behalves of other and then transfers to person account.
Smart cards are also one form of electronic funds transfer and many other companies also issued their own card systems. Mobile transfer is one such latest technology of electronic transfer emerging very rapidly all over the world.