-Introduction :
The landscape of shopping has changed on a global level in the last decade. What once was limited to physical transactions between two individuals, now seems a distant memory with the advent of online shopping. How do you make payments for these online purchases? What is the meaning of going cashless and thriving in a cashless economy? How does the mere swiping of cards in one part of the world ensure a secure payment to someone sitting on the opposite end of the world? The answer to all these questions is the concept of Electronic Fund Transfer.
In simple words, electronic funds transfer can be defined as a system of exchange wherein, money is transferred from the account of one person to another. This system uses a secure network built around the internet to ensure that the transactions are completed in a safe environment whilst ensuring the privacy of the transacting parties and the amount involved in the transaction. In today’s dynamic world, one could say that the electronic funds transfer system has increased the ease of doing business globally.
-Common uses of electronic funds transfer :
1) using credit/debiting cards
2) online bill payment
3) direct debit
4) direct deposit
5) international transaction
-Benefits of electronic tranfer funds
There are multiple benefits associated with the use of electronic funds transfer. Some of these benefits have been enumerated below :
The transactions occur at a fast pace and the transfer of money between the parties is completed within a matter of seconds, irrespective of the location of the transacting parties.
1)There is minimum human intervention involved in the transaction, i.e., one does not have to wait for approvals from the banks for conducting online transactions
2)It is a time-efficient process.
3) The risks of forgery that plagued the era of negotiable instruments is avoided.
