Electronic Funds Transfer (EFT) payments are an alternative payment solution that allow businesses to take payments quickly and securely.
For business owners, from small to enterprise, taking and making payments is a regular and vital part of their everyday activities. Whether it’s paying staff or vendors, or receiving payments from customers, the ability to make quick, seamless, and secure payments is a key component in business.
Electronic payments offer an easy payment solution that allow businesses to take payments quickly and securely. Our guide will help you understand what they are and how they work.
EFT Meaning: What is EFT?
An EFT is an electronic transfer of money from one bank account to another, meaning there is no need for direct intervention by bank staff. EFT payments can be carried out between any two accounts, whether they’re based at the same financial institution or not.
It’s important to understand that the term EFT payment does not refer to a single type of payment. The term “EFT payments” refers to a number of different electronic payment methods. This includes ACH payments and direct debit payments, as well as many more.
Types of EFT payments
EFT payments come in a number of different forms and come with all the benefits associated with electronic banking and payments. Here are some of the most common types of EFT payment:
Automated Clearing House (ACH) payments are payments processed through the Automated Clearing House via the ACH network and not through traditional card networks.
Credit or debit card payment
A credit or debit card payment is a type of EFT payment for consumers when paying businesses for goods or services, through a device. They can also be used to move money from business bank accounts or to pay bills.
An electronic alternative to paper checks, eChecks work in similar to a paper check but allow businesses and consumers the ability to use these payments in an increasingly digital world. All you need is the routing number and bank account number, and an eCheck transfer can be made. You can find out more about eChecks here.
Wire transfers are typically used when transferring large sums of money from one financial institution account to another. This type of payment is often used for consumers or businesses making a big purchase, such as a new property or new equipment.
How does EFT work?
Not all EFT payments are processed through the ACH network, but all ACH payments are EFTs. An ACH payments is one type of EFT payment. In the United States, the ACH network is the national automated clearing house for electronic funds transfers. It processes financial transactions for consumers, businesses, and federal, state, and local governments.
To complete an ACH payment, the sender needs to provide information such as the name of the recipient’s bank, account number, routing number, and the payment amount. The exact process for EFT is dependent on the type of EFT payment being used, but it doesn’t always go through the ACH network.
Using EFT payments to take your payment solutions online and into the electronic world is the perfect way to ensure your processes are streamlined and secure. Visit our payments section to find out more about how the right payment solution can help you reach more customers while providing secure payment options.