EFT and ACH Transactions
Most forms of consumer monetary transactions involve a collaboration of entities representing the consumer, business, banking/financial, and government sectors. The instrument form, payment application, and delivery technology have all evolved from the simple check or draft where an account holder issues a written order that authorizes the recipient to submit the instrument for payment. Thanks to the World Wide Web, we have seen credit and debit cards rise in monetary transaction importance, but check-based instruments still exist and are, in fact, making a comeback. This is due to two relatively new ways of handling check-style payments electronically by EFT and ACH Transactions.
Electronic Funds Transfer & Automated Clearing House Payments
(EFT) and/or (ACH) is a non-check method for electronic payments and collections. EFT or ACH Transactions are considered safe, yet is less expensive than paper checks. The government, a large user of EFT & ACH, estimates a cost of $0.86 to issue each check payment, whereas, it costs only $0.09 to issue an EFT payment. Moreover, checks normally take time to cash plus time for various functions in the check-clearing system. EFT & ACH Transactions technology makes it more efficient and convenient by significantly reducing paperwork. ·
Direct EFT & ACH
Direct EFT and ACH Transactions use the government-industry’s clearinghouse function to enact monetary transfers electronically without paper checks. EFT and ACH Transactions may include paychecks, payments to contractors or vendors. They also include consumer payments for things such as products, liabilities, mortgage loans, and all sorts of bills. Of course, businesses also use ACH to collect from customers online, rather than accepting credit or debit cards. When shopping for systems, software, and products to help your business to compete as an online e commerce merchant, don’t forget to include EFT and ACH Direct payment options in your planning.
EFT in General
Electronic funds transfer (EFT) is the system behind many financial transactions that do not involve physical exchange of cash or checks. If you’ve ever received a direct deposit of a paycheck or tax refund, you’ve used EFT. This method is popular with government agencies because sending an EFT payment costs a fraction of what it costs to print and mail a check. They also eliminate issues with checks being stolen, subject to postal misadventures, or lost by the recipient. Funds are available immediately in many cases. EFTs are also used for credit- and debit-card transactions, automatic-teller withdrawals and mail order, phone and Internet purchases.
Our professionals at SecureGlobalPay are well prepared to advise you and supply you with your entire Internet merchant account needs.