An electronic funds transfer (also known as OFT) is a system for transferring money from one bank to another without using paper money. Its use has become widespread with the arrival of personal computers, cheap networks, Improved cryptography and the Internet. Since it is affected by financial fraud, the electronic funds transfer act was implemented. This federal law protects the consumer in case a problem arises at the moment of the transaction. The history electronic funds transfer originated from the common funds transfer of the past.
Since the century, and with the help of telegraphs, funds transfers were an usual thing in commercial transactions. Finally, It migrated Itself to computers and became the electronic money transfers of today. One of the most common Left’s Is Direct Deposit. It is used by employers for depositing their employees’ salary in a bank account. Other kind of OFT is the automatic charge to your check or savings account. For example, when you are paying a mortgage, the bank will discharge the monthly payment from a pre-accorded bank account.
The benefit is that you won’t have to go to the bank to do it. It’s automatic. Another kind of OFT is a cash card. With this type of card you can spend a prepaid amount of money until the balance Is zero. So, If you wish to make a gift certificate without tying up your beneficiary with one store, you can buy a cash card from your favorite bank. Tm’s are also used for Left’s. Since an automatic teller machine is much cheaper than a group of bank tellers, it has helped to bring costs down and beneficiary the costume. Points of sale (also known as PAS) are also part of this group.
Those little blue or dark blue machines in which you pass our card are doing an electronic fund transfer from your account to the retail account. Imagine how the world without them was. Slow, wasn’t It? What Are The Pros? The main advantage of an electronic funds transfer is time. Since all the transaction is done automatically and electronically, the bank doesn’t need to pay a person to do it, a person to drive the loans to the other bank. The cost of the transport, the cost of the maintenance of the transport, online auto Insurance and the gas of the transport. Feet’s have revolutionized modern banking. The benefit Is Immediate payment, which brings an up to date cash flow. You wont hear either about lost checks causes by the inefficiency of normal mail (nowadays known as snail mail for its velocity compared to emails) and up to date bookkeeping. The good thing is that a lot of merchants and consumers have found these advantages and have migrated to Set’s. So It Isn’t 1995 when only some companies offered this service and only some people used It for buying things and paying their bills. And, as the consumer base Increased, also did the type of services and the reduction of transfer prices.
Feet’s are a good example of the wonders of an open market economy. The service is trusted and tested daily by the foreign currency exchange specialists who deliver millions of pounds worldwide. Problems with Electronic Funds Transfer popularization of the Internet, a series of scams have appeared, trying to lure consumers to give away bank accounts, personal identification numbers or paying for goods or services they never received. The companies that give an OFT service have always stated that they are not responsible of fraud, but they know that their customer base will depend on how secure they are.
For these reasons, almost all financial institutions have implemented processes for validating the security of an operation. Another measure that may have caused some inconveniences to consumers is the establishment of top limits for money transfers. The reasons, Feet’s were used by illegal organizations for laundering money and for tax evasion by some companies. And, since the attacks to the World Trade Center in September 1 1 of 2001, the US Government has imposed a series of measures to control any activity related to terrorist funding.
Unfortunately, even with all of these security measures, common to hear in the news crimes related to Set’s. Although security has tightened and financial cryptography has improved a lot in the last five years, there isn’t such thing as unbreakable systems or 100% secure transaction. After this explanation, you won’t need to continue asking yourself what is an electronic funds transfer. Now that you know it, consider this. Are you using it enough? Tm’s and the internet have been around for some time so you shouldn’t be afraid to use them. Consider that there is already an electronic funds transfer act that protects you from any event.