Electronic Funds Transfer (EFT)
What It Is and How It Works
EFT is a method for transferring money automatically by using the facilities of the Automated Clearing House (ACH), an entity associated with the Federal Reserve Banks. EFT is the only system by which a merchant can initiate a transaction to collect money from the bank account of a customer located anywhere in the USA. In addition, it can be used to transfer money outwardly to pay bills.
One of the most important features of EFT collection is that the money is automatically transferred on the DUE DATE as CASH, not uncollected funds. The cost of collection via EFT is less than the cost of conventional methods of bill collecting, using statements, mail, postage, employee costs, etc. EFT costs are based on the number of transactions, regardless of the dollar size, and this cost with very large volume is negotiable. In conjunction with lower per transaction costs, there are lower charges for a bounced check.
More information about EFT/ACH:
Automated Clearing House (ACH) & ACH Services
Who Needs This Solution?
Who does EFT? Only banks or financial corporations with bank guarantees may transmit directly into the EFT network.
EFT is an excellent choice for companies with web sites, future service and membership based companies, such as health clubs, leasing and loan companies, subscriptions, and insurance companies, etc.