electronic funds transfer

finance

Also known as: EFT

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Last updated

July 16, 2026

Quick Summary

Electronic Funds Transfer (EFT) refers to systems that allow for the electronic movement of money between accounts. This can include withdrawing cash from ATMs, using smart cards with stored value, automated clearinghouse (ACH) networks for direct deposits and bill payments, and other electronic transfer systems that net payments between financial institutions. These technologies, which emerged after World War II, reduce the costs and increase the convenience of financial transactions compared to traditional currency. While often referred to as "electronic money," it's more accurately described as electronic transfer, as most transactions involve existing forms of money rather than a new medium of exchange.1

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money
Electronic money
First, depositors can use electronic funds transfers (EFTs) to withdraw currency from their accounts using automated teller machines (ATMs). In this way an ATM withdrawal works like a debit card. ATMs also allow users to deposit checks into their accounts or repay bank loans. While they do not replace…
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First, depositors can use electronic funds transfers (EFTs) to withdraw currency from their accounts using automated teller machines (ATMs). In this way an ATM withdrawal works like a debit card. ATMs also allow users to deposit checks into their accounts or repay bank loans. While they do not replace…
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payment
called negotiable instruments), or by electronic funds transfer. Where payment is made by negotiable instrument, the general rule is that the acceptance of such instrument by the creditor operates only as a conditional payment. This means that if the instrument is subsequently dishonoured, the debt revives, and the creditor may…
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called negotiable instruments), or by electronic funds transfer. Where payment is made by negotiable instrument, the general rule is that the acceptance of such instrument by the creditor operates only as a conditional payment. This means that if the instrument is subsequently dishonoured, the debt revives, and the creditor may…
Read More