Do not require too much time and are less resource-draining than cheques.EFTs are better than cheques because they: ChequeĪ physical paper cheque might seem like a thing of the past, but even though it’s discouraged by almost all business and governmental entities, it’s still used. There are a few other methods you can transfer funds from one bank account to another, but there are two that can be adequately compared with an electronic funds transfer: a cheque and an Interac e-Transfer. One of the reasons some EFTs take such a long time is that amounts over $10,000 are usually monitored, but there might be other checks as well. Moreover, certain EFTs are monitored by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). A merchant account, which is something a business should have to receive EFTs.The payment processor, which is an entity, a set of protocols, or both that accepts or rejects your payment based on specific criteria (e.g., whether you have the requisite amount for the transfer, if the recipient details are in order, etc.).The payment gateway, which is the go-to “system” between where the transfer is initiated from, i.e., your phone/computer/a POS, etc., and the bank (this is where you put in the request to make the EFT to another account).Well, note that there are three steps you should know when completing an EFT:

The concept of electronically transferring your money from one bank account to another now seems quite simple, even though it would have shocked people a few decades ago.īut you might start questioning the efficiency of this supposed modern system when an EFT is usually sent in one or two business days, but can potentially be longer depending on the bank. It can be between individuals, businesses, individuals and businesses, or government entities and individuals.Ī broader definition of EFT includes consumer electronics systems like automated teller machines (ATMs) and point of sale (POS).įor example, if you transfer money to someone or a business using your debit card at an ATM (like when you pay a bill), your money will be transmitted via an EFT.Īlso, if you transfer money directly from your bank account to a retailer using their POS system (possibly through a QR code payment system), it might use an EFT.

Conclusion What Is an Electronic Funds Transfer?Įlectronic Funds Transfer (EFT) is the electronic transference of money from one Canadian bank account to another.

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