What is an EFT?
Also known as an Electronic Funds Transfer, an EFT forgoes paper money through administering financial transactions between two parties via electronic signals. An EFT gives the user easy access to financial information but more importantly can facilitate financial transactions at a lightning pace without the requirement of physical tangible information that can be tedious to process, enabling a less efficient method of processing vital financial information that can’t keep up with the fast-paced growth of your business.
Essentially an EFT payment is any Etype of electronic transaction that doesn’t use the bank as a direct intermediary but gives you the essential ability to transfer from one account to another.
However, EFT’s payments are widely popular in B2B transactions, this can be through payroll, wire transfers, and ACH’s (Automated Clearing House, a computerised network for processing low-value domestic payments).
A Brief History of EFT’s
While transferring funds were a usual aspect of business transactions during much of the 19th century through the use of telegraphs, EFTs were introduced in 1871 by Western Union.
However, EFT’s started to take off during the 1960s but with the introduction of ATM’s as a method of withdrawing funds EFT’s started to garner major traction towards becoming incredibly commercially viable
In today’s world, EFT’s run almost most commercial transactions from daily coffee purchases to salaries, wire transfers, card transactions to large inventory purchases for the business, the possibilities with the advent of EFT’s are quite transformational and endless for the global economy simply due to its ease of use, accessibility and speed compared to manually handling funds for various purposes be it for purchases or deposits.
3 Major Reasons why you should use EFTs’ as part of your ERP Solution
How quickly can you move your money using EFT as part of your ERP solution?
A traditional check would need you to wait 14 days for you to transfer or make your funds available due to the various manual processes that are being handled, whereas an EFT transaction can take 1-2 business days domestically and a maximum of 3-4 business days for international transfers. However, most consumer-level transactions are immediate or at least on the same day.
A major advantage of this efficient movement of funds through EFT is that you as a business can administer operational or functional changes of your business immediately through your revenues as they remain updated frequently.
Ok, now that you know why you should use EFTs’ as part of your ERP solution, its important to recognise EFTs’ are an Umbrella term that encapsulates a wide variety of electronic payments;
Here are 7 Types of EFTs’
1. Direct Debit
2. Direct Deposit
3. ATM (Automated Teller Machines) Transfers
4. Mail Order/Telephone Order
6. Wire Transfers
7. Debit/Credit Card
How EFT is used as part of your ERP solution
EFT’s are efficient in a manner of giving you the user easy access and management for future or past transfers, helping you adapt to fast paced global market through ease of use, accessibility and speed with the help of an ERP system that manages and secures all your transactions for the future.