With the advancement of technology in the banking sector, cash-based money transfers are being modernized in favor of electronic money transfers. It is used to transfer money locally, internationally, and even to pay for services in different sectors.
The transfer of funds from one bank account to another is known as money transfer. The bank accounts may be from the same or separate banks, as well as from the same or different countries.
Domestic money transfer occurs within the same country; whereas, global or international money transfer occurs when it occurs between countries. Money can be transferred physically with cash or electronically with the use of a computer, phone, or electronic terminal.
Electronic money transfer has a number of benefits and drawbacks.
Benefits
A transaction can be challenged
If you make an error when using EFT, you have the right to request that your bank investigate the situation. While it may take some time, you can rest assured that you will not lose money on any transaction.
EFT is widely regarded as a secure method of receiving cash
Receiving money via wire transfer is generally safe. Payments are more secure using this method since an institution will only send funds that are currently available.
When the money arrives, you usually have it within one business day — however there may be occasional exceptions in certain circumstances. It’s also impossible for a sender to return money after it’s been transferred to you.
It is quick
When you transfer money the old fashioned way, it can take some time to get the money. Electronic money transfer, on the other hand, can be accessed within 1-2 business days, if not the same day.
If you send money to someone else in another country, it will take 3-4 business days for them to receive it.
Cheaper and more secure
Because of the bank fees, traditional money transfers are more expensive. It also avoids the possibility of you losing money due to fraud.
You are not required to pay with a credit or debit card.
If you wish to pay for something, you can do it using your phone or by converting an electronic check.
You can set up recurring payments
If you have monthly subscriptions, it’s simple to forget to pay them on a monthly basis. Electronic money transfer enables a business to bill money from your account without you having to do anything.
They don’t require a freeze on your funds
You are not required to wait for funds to clear before claiming or utilizing your funds.
Convenience
You don’t need to go to the bank to transfer money internationally or domestically because you can do it from anywhere and at any time.
Drawbacks
You must get the funds right away
Unlike when using a credit card, you must have the money with you to transfer money electronically or pay for something.
You will not receive a canceled check
You don’t get a canceled check from the bank after making payments via electronic money transfer, so check your statements to make sure it was the appropriate transaction.
Some electronic funds transfers must be notified to the authorities
If you want to send more than $10,000, the transaction must be reported to the authorities, depending on the country’s structural law.
It creates purchasing opportunities around the clock
For certain users, the convenience of an electronic funds transfer might also be a downside. In the Internet economy, the desire to buy something implies that anyone with a data connection has access to purchasing options 24 hours a day, seven days a week.
Sellers want to facilitate this process by removing any potential roadblocks to a purchase.
Some sellers refuse to accept electronic cash transfers and may even refuse to take a debit card. Because universal acceptance is unlikely to occur, consumers must have access to a variety of payment options to ensure that they may purchase what they require.
Conclusion
The traditional electronic funds transfer connects directly to the bank account of the payer. Although moving money between checking and savings accounts is a secure operation, there are some flaws in the system that may cause some customers to hesitate when dealing with a merchant.
It doesn’t require much personal information to finish the process, but supplying bank account details when using a debit card adds another layer of security.
When someone does not wish to utilize a debit or credit card, EFTs make sense. Some people may be unable to use these payment options.
This procedure provides them with a second chance to become a customer. Because businesses and customers must establish a common ground, these electronic funds transfer benefits and drawbacks must be considered. If we can keep expenses low while expanding shopping options, everyone will feel like a winner at the end of the transaction.
