Electronic funds transfer

Electronic funds transfer (EFT) is the electronic exchange or transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer

Computer

A computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem...

-based systems.

The term covers a number of different concepts:

• Cardholder-initiated transactions, where a cardholder makes use of a payment card
  Payment card
  The term payment card covers a range of different cards that can be presented by a cardholder to make a payment.-Types:Typically a payment card is backed by an account holding funds belonging to the cardholder, or offering credit to the cardholder. Payment cards can be classified into types...
  
  
• Direct deposit
  Direct deposit
  Direct deposit also known as Direct credit is a banking term used to refer to certain payment systems used to transfer money where a payment is initiated by the payer not the payee, namely:* In Europe, the giro system...
  
   payroll payments for a business to its employees, possibly via a payroll service bureau
  Payroll service bureau
  A payroll service bureau is an accounting business whose main focus is the preparation of payroll for other businesses. Such firms are often run by Certified Public Accountants, though a typical payroll processing company will refer to itself as a service bureau rather than a CPA firm, to...
  
  
• Direct debit
  Direct debit
  A direct debit or direct withdrawal is an instruction that a bank account holder gives to his or her bank to collect an amount directly from another account. It is similar to a direct deposit but initiated by the beneficiary...
  
   payments, sometimes called electronic checks, for which a business debits the consumer's bank account
  Bank account
  A Bank account is a financial account recording the financial transactions between the customer and the bank and the resulting financial position of the customer with the bank .-Account types:...
  
  s for payment for goods or services
• Electronic bill payment
  Electronic bill payment
  Electronic bill payment is a feature of online banking, similar in its effect to a giro, allowing a depositor to send money from their demand account to a creditor or vendor such as a public utility or a department store to be credited against a specific account...
  
   in online banking
  Online banking
  Online banking allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.-Features:...
  
  , which may be delivered by EFT or paper check
• Transactions involving stored value of electronic money
  Electronic money
  Electronic money is money or scrip that is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems...
  
  , possibly in a private currency
  Private currency
  A private currency is a currency issued by a private organization. It is often contrasted with fiat currency issued by governments or central banks. In many countries, the issue of private paper currencies is severely restricted by law....
  
  
• Wire transfer
  Wire transfer
  Wire transfer or credit transfer is a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office...
  
   via an international banking network (carries a higher fee in North America)
• Electronic Benefit Transfer
  Electronic Benefit Transfer
  Electronic Benefit Transfer is an electronic system in the United States that allows state governments to provide financial and material benefits via a plastic debit card. Common benefits provided via EBT are typically sorted into two general categories: Food and cash benefits...
  
  

In 1978 the U.S. Congress passed the Electronic Funds Transfer Act

Electronic Funds Transfer Act

The Electronic Fund Transfer Act was passed by the U.S. Congress in 1978 and signed by President Jimmy Carter, to establish the rights and liabilities of consumers as well as the responsibilities of all participants in electronic funds transfer activities....

 to establish the rights and liabilities of consumers as well as the responsibilities of all participants in EFT activities in the United States.

See also

• Debit card
  Debit card
  A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
  
  
• Wire transfer
  Wire transfer
  Wire transfer or credit transfer is a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office...
  
  
• Automated Clearing House
  Automated Clearing House
  Automated Clearing House is an electronic network for financial transactions in the United States. ACH processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit payroll and vendor payments. ACH direct debit transfers include consumer payments...
  
  
• Hardware security module
  Hardware Security Module
  A hardware security module is a type of secure cryptoprocessor targeted at managing digital keys, accelerating cryptoprocesses in terms of digital signings/second and for providing strong authentication to access critical keys for server applications...
  
  
• E-commerce payment system
• Electronic money
  Electronic money
  Electronic money is money or scrip that is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems...
  
  
• Electronic funds transfer at point of sale