Electronic payment, or electronic fund transfer, is the process of moving money from a customer's account to the merchant's account when making an online purchase of a good or service.
There are several examples of electronic fund transfers (EFTs) commonly used in the United States. Here are some of them:
Direct Deposit: Many employers use direct deposit to transfer employees' salaries directly into their bank accounts. This eliminates the need for physical paychecks and allows for quick and convenient access to funds.
Online Bill Payments: With online banking services, individuals can pay their bills electronically. They can set up recurring payments or make one-time payments to various service providers such as utility companies, credit card companies, or mortgage lenders.
Wire Transfers: Wire transfers are electronic transfers of funds between different banks or financial institutions. They are often used for large transactions or when immediate availability of funds is required, such as for purchasing real estate or making international money transfers.
Automated Clearing House (ACH) Transfers: ACH transfers are electronic transfers that allow individuals, businesses, and organizations to move funds between bank accounts. They are commonly used for various purposes, including direct deposit of salaries, transferring funds between personal accounts, and making online payments.
Peer-to-Peer Payments: Peer-to-peer (P2P) payment platforms enable individuals to send money to each other electronically. Popular examples include Venmo, PayPal, Zelle, and Cash App. Users can link their bank accounts or credit cards to these platforms and transfer funds to friends, family, or acquaintances.
Mobile Banking: Many banks offer mobile banking apps that allow customers to transfer funds between accounts, pay bills, and send money to others using their smartphones or tablets. These apps often provide a convenient and secure way to manage finances on the go.
PayPal and Stripe are not exactly considered electronic fund transfer (EFT) systems in the traditional sense. While they facilitate online payments and money transfers, they operate as third-party payment processors rather than directly transferring funds between bank accounts.Both PayPal and Stripe offer additional features such as payment protection, dispute resolution, and integration with various e-commerce platforms. While they are not traditional EFT systems, they play a significant role in facilitating electronic payments and transactions in the digital space.