Electronic funds transfer (EFT) has quickly become a popular method of payment processing in the financial technology (fintech) industry. This technology allows for the electronic transfer of funds between bank accounts, and is often used for online transactions, recurring payments, and other types of digital financial transactions. However, EFT has some limitations that have only just started to be addressed by fintech companies who can expand what EFT payments can do.
EFT payment processing is a secure and efficient way for businesses to accept payments from their customers. It eliminates the need for physical checks or cash, and reduces the risk of fraud aswell as common errors associated with manual transactions. EFT transactions are processed relatively quickly, however depending on the channels they go through, this can be up to 3 to 5 days.
One of the key advantages of EFT payment processing is that it is easy to use and set up. Businesses can use a variety of methods to accept EFT payments, such as through an online portal, a mobile app, or a point-of-sale (POS) system. Customers can easily initiate an EFT payment by providing their bank account information, and the transaction is processed automatically through the network.
EFT is recognized as a great payment method for businesses, however it does have some drawback. The main downside of EFT is that it usually processes in around 3 days, and sometimes as many as 5. This is due to the nature of the transaction type, and can often be a turn off for businesses who need faster transactions. This is where fintech comes into play. Fintech companies are leveraging new banking technology to open up the EFT network and speed up the time in which payouts happen. Some of these companies are even offering same day EFT payments which is making EFTs much more popular.
One of the biggest time consumers for many business is the accounts receivable and payable processes, which involves submitting payments going in and out. Some payment platforms have automation workflows built into them, meaning they can automate the billing and collection processes, saving time and reducing the need for manual labor. It also provides businesses with detailed records of their transactions, making it easier to track their financial performance and identify any areas that need improvement. Additionally, EFT payments can be easily integrated with other systems, such as accounting software, making it easy to manage all aspects of a business’s finances in one place.
Another advantage of EFT payment processing is that it is highly secure when compared to other payment methods like credit card. Transactions are processed through secure servers and are protected by encryption and other security measures. This reduces the risk of fraud and ensures that customers’ personal and financial information is protected.
In conclusion, EFT payment processing is a reliable, secure and efficient way for businesses to accept payments from their customers. It eliminates the need for physical checks or cash, and reduces the risk of fraud and errors associated with manual transactions. It is easy to use and set up, and provides businesses with a number of benefits such as automation of billing, detailed records of transactions and integration with other systems. Additionally, it is a cost-effective solution that can save businesses money on transaction fees.