![]() At checkout, you slide your debit card into the payment terminal to settle your bill. ![]() Let’s say you’re at the grocery store and ready to pay.Here are two examples to help you understand how money moves across payment networks. When the sender commits to sending funds to the receiver, that payment goes out through the appropriate payment network and moves money from the sender’s account to the receiver’s account. How Does EFT Work?ĮFT payments need two parties to work: a sender and a receiver. Some peer-to-peer payment apps, such as PayPal, offer debit cards to their users, making it easier to access funds held in the payment platform. They leave money in the app and pay vendors and people directly, using the P2P platform as a makeshift bank account. Some users don’t transfer funds through these apps to their banks. P2P platforms can act as holding tanks for funds received. When you want to send a payment, you open the app, enter the information for the receiving party, confirm your transaction and send money. Some apps allow you to connect your credit card (usually for a charge per transaction). When you register to use one of these applications, you can link your debit card, bank account, or both. These peer-to-peer (P2P) payment systems use EFT technology to move money. What Are Peer-to-Peer Electronic Payments?Īpps like Cash App, PayPal and Venmo make it easy to send funds from person to person in a flash. Likewise, if you’ve used an app on your smartphone to send money to a friend for a restaurant tab, you’ve used EFT technology. ![]() If you’ve used online banking to move money from your checking to your savings account, you’ve used EFT technology. What Is an EFT Payment?Īn EFT payment is another name for an EFT transfer. ![]() Direct deposit, credit card transactions, ATM transactions, electronic checks and phone payments are all types of EFT payments. This payment technology is used to pay bills, send money to friends and family and compensate workers each payday.ĮFT payments are a speedier alternative to physical payment methods like cash and checks. Via CurrencyFair's Website What Is an Electronic Funds Transfer?Īn electronic funds transfer is the electronic transfer of money between people, banks and companies. ![]()
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