Electronic Fund Transfer Meaning

Meaning of Electronic Fund Transfer

You would surely buy anything online. At that time, you pay with your credit or debit card. Actually, at that time, you are doing electronic funds transfer. In simple words, electronic funds transfer means the online and computer transfer of money from one bank account to other bank account. According to EFT Act of USA, bank is not responsible for unauthorized withdrawals, if EFT card is lost or stolen by customer. But if financial institution fails to transfer fund correctly as per the term and conditions of consumer, that financial institution is responsible for paying  penalty plus that short amount.

Advantage of Electronic Funds Transfer


 Main benefit of EFT is to pay or get payment fastly. Multiple financial institution may deal with the help of EFT. Use of every bank's ATM can be possible due to EFT system. Direct deposit, direct debit, wire transfer and online banking are the main methods of electronic fund transfer. One of the largest companies that offer EFT service is  Western Union.

Disadvantage of Electronic Funds Transfer

Western Union. $100 billion of which goes anonymously to families in developing countries. Although Western Union keeps information about senders and receivers, some transactions can be done essentially anonymously, for the receiver is not always required to show identification. Link

Related : How to Receive Money from Western Union