Funds Transfer System (FTS)
What’s a fund transfer system?
The fund transfer system is the one that ensures money flow from/to business/individual accounts without cash involved. Another definition is an electronic fund transfer system because the transactions go from account to account online. It’s easy to understand the EFTS popularity. Online money is more widespread now. Users prefer them to cash because of security, convenience, and speed.
There are two types of EFTS: online transactions and PIN-debit transactions.
The system lets users pay for goods and services online. But enables other functions as well. For instance, pay for bank services, get salaries, withdraw money from payment cards. Let’s take a look at two transfer system types.
Plastic card systems (or credit card systems)
As it becomes clear from the name, the system uses credit cards to make payments. Though all actions happen virtually, interaction with traditional banks still takes place. They check and authorize the transaction. The transfer itself flows via the encrypted protocol. The system also requests customers’ authentication to make sure the transaction is legal.
E-checks or e-money systems (or debit systems)
The base of this transfer system is digital data. In this case, there’s no need to involve the bank in the process. Basically, independency from brick-and-mortar banks is the perk of this system.
Electronic fund transfer systems are becoming more popular over the years. The reason is its speed and security.