As the name implies, an electronic funds transfer (EFT) describes the process by which parties send and receive money (i.e., “funds”) through electronic channels. Although the term is often used interchangeably with Automated Clearing House (ACH) payments, EFTs encompass a much broader range of payment options, including wire transfers, e-checks and even PayPal.
Businesses typically use electronic funds transfers as a substitute for checks and cash — payment forms that carry a number of hidden costs:
- Cash is easily lost. It’s very difficult to replace. And it’s time-consuming to count, organize and record.
- Checks are expensive to process due to all the employee hours, trips to the bank, postage and material resources involved.
How Do EFT Payments Actually Work?
The basic process is straightforward. Both the sender and receiver link their accounts to a secure electronic network and initiate a payment. Those payments can be automated and recurring, as is the case with direct deposit sent over the ACH Network. But they also can be for one-off transactions if:
- A customer is making an e-commerce purchase using PayPal
- A relative is sending money to a family member via wire transfer
In addition, neither party has to use his/her bank accounts to send or receive funds. With electronic funds transfers, you can use credit cards, debit cards, PayPal balances, or even a cryptocurrency balance (i.e., Bitcoin).
Why Use EFTs If You Already Accept Credit Cards?
If you’re a merchant who already accepts credit and debit cards, why would you ever need to explore another payment option? After all, most forms of plastic already permit users to send and receive money electronically.
The reason is simple. The more payment options you provide, the more customers you’ll be able to reach. Not everyone enjoys using credit cards, checks or cash.
To give you an idea of how large a market this includes, consider the following:
- One payment vendor, PayPal, is responsible for $280 billion in electronic transactions annually.
- When you add the ACH Network, the transactional volume exceeds exceeds $41 trillion.
By not setting up your payment environment for electronic funds transfers, you’re missing out on a lot of potential sales.
Why Trust BluePay with Your EFT Payment Processing?
As you begin exploring different EFT services, you’ll likely come across a number of competing offers. So why choose BluePay as your payment processor?
Here are a few reasons:
- All of our electronic funds transfer solutions benefit from the latest in PCI data security protection. As a result, your financial information remains safe from fraudulent attacks.
- We make getting started as simple as 1-2-3. Our EFT platform is incredibly easy to use, but it’s also robust enough to expand as your business’s needs continue to evolve.
- Our EFT software offers unmatched flexibility. You have the option of relying exclusively on BluePay’s financial institution. But you can also set up EFT payments with any of the major banks we currently support, including U.S. Bank, PNC, MB Financial, Wells Fargo, ACB Bank, Bank of America, Comerica, Chase, Citizens Bank and Capital One.