Electronic Fund Transfers

Topics: Electronic funds transfer, Money, Electronic money Pages: 3 (826 words) Published: February 1, 2011
An electronic funds transfer (also known as EFT) is a system for transferring money from one bank to another without using paper money. Its use has become widespread with the arrival of personal computers, cheap networks, improved cryptography and the Internet. Since it is affected by financial fraud, the electronic funds transfer act was implemented. This federal law protects the consumer in case a problem arises at the moment of the transaction. The history electronic funds transfer originated from the common funds transfer of the past. Since the 19th century, and with the help of telegraphs, funds transfers were an usual thing in commercial transactions. Finally, it migrated itself to computers and became the electronic money transfers of today. One of the most common EFT's is Direct Deposit. It is used by employers for depositing their employees' salary in a bank account. Other kind of EFT is the automatic charge to your check or savings account. For example, when you are paying a mortgage, the bank will discharge the monthly payment from a pre-accorded bank account. The benefit is that you won't have to go to the bank to do it. It's automatic. Another kind of EFT is a cash card. With this type of card you can spend a prepaid amount of money until the balance is zero. So, if you wish to make a gift certificate without tying up your beneficiary with one store, you can buy a cash card from your favorite bank. ATM's are also used for EFT's. Since an automatic teller machine is much cheaper than a group of bank tellers, it has helped to bring costs down and beneficiate the costumer. Points of sale (also known as POS) are also part of this group. Those little blue or dark blue machines in which you pass your card are doing an electronic fund transfer from your account to the retail account. Imagine how the world without them was. Slow, wasn't it?

What Are The Pros?
The main advantage of an electronic funds transfer is time. Since all the transaction is done...
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