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Electronic funds transfer (EFT) is the transfer of money from onebank account to another, either within a singlefinancial institution or across multiple institutions, viacomputer-based systems.
The funds transfer process generally consists of a series of electronic messages sent between financial institutions directing each to make the debit and credit accounting entries necessary to complete the transaction. An electronic funds transfer starts when the sending customer send an electronic instruction with the purpose of making payment to the beneficiary or the receiving customer.[1]
According to the United StatesElectronic Fund Transfer Act 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 todebit orcredit a consumer's account".[2]
EFT transactions are known by a number of names across countries and different payment systems. For example, in theUnited States, they may be referred to as "electronicchecks" or "e-checks". In theUnited Kingdom, the term "BACS Payment", "bank transfer" and "bank payment" are used, inCanada, "e-Transfer" is used, while in severalEuropean countries "giro transfer" is the common term.
Electronic Funds Transfer (EFT) is an umbrella term that refers to a number of different transfer methods:[2]
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