Talk:Electronic funds transfer/Archives/2014

Questions

• What are the differences between EFT and wire transfer? Shawnc 14:53, 10 January 2007 (UTC)

In the US at least, wire transfers using the Federal Reserve system occur almost instantaneously, and the funds are available to the recipient immediately upon receipt. No "hold" or clearance time. EFT usually takes 1-3 business days, and a hold is usually placed on the funds, to ensure that there were sufficient funds in the sender's account, i. e., that the "check" doesn't "bounce".

Fed Funds wire transfers: Alice goes to her bank, Bank X, and tells them to wire $10,000.00 to Bob at Bob's bank, Bank Y. Bank X verifies that Alice has sufficient funds available. Assuming both banks are members of the Federal Reserve System, Bank X tells the Fed to transfer $10,000.00 from Bank X's account at the Fed to Bank Y's account at the Fed, and for Bank Y to credit it to Bob. Since this is real-time transfer between member banks' accounts at the Fed, Bob's bank should credit Bob almost instantly, although some banks check for received wires only every hour or two. For the same reason, there is no hold placed on Bob's use of the funds, because they came from an account at the Fed. This is why Fed Funds transfers are becoming the standard for, say, real estate closings -- banks are putting holds even on cashier's checks, because of the volume of fraudulent cashier's checks (color printers and all). Alice's bank has already vouched, and debited her account immediately; the Fed vouches to Bob's bank, who therefore credits Bob immediately, with no hold.

If Alice's bank is not a member of the Federal Reserve, which is true of, e. g., most credit unions, her credit union will have a "correspondent bank" that *is* a member of the Fed. Alice's credit union must send the request to that bank, who then proxies for Alice's credit union, debiting the credit union's account at the correspondent bank. Similarly, if Bob's institution isn't a member of the Fed system, the wire will be received by Bob's credit union's correspondent bank, which credits it to the account of Bob's credit union, with instructions for them to credit it to Bob. This can cause several hours' delay, depending on how busy (or conscientious) the credit union is. A branch of a credit union may have to fax the request to headquarters to initiate this process, adding further delays. Still, it should be same-day, if initiated by, say, 1 or 2pm, or early next morning if done late in the day -- and there is still no hold to the recipient. But using Fed-member banks is the fastest, which may be crucial in a time-sensitive transaction. (Real estate closing scheduled for 11 am. Going to Fed-member bank to wire money at 9am should be fine. If done through a credit union or other non-Fed institution, better to wire the day before, which would cost a day's interest.)

The labor of personnel involvement in Fed wires -- Alice's bank has to type up her request, authenticate her if they don't know her well, have her sign it, and send it to the Fed -- is why fees are usually charged. EFT is Bob's bank debiting Alice's bank directly, where Bob's bank doesn't know for certain that Alice has the funds. Hence the hold, but because this can all be done online and without Fed involvement, it's low or no cost. An example is if you have both an online-only bank and a local physical bank, and want to transfer money from one to the other. You can do that online (having previously set up authorization and verification, one time only), and it happens automatically. No employee involvement, so no cost. Sorry that I don't have time to properly source all of this and add it to the article. Unimaginative Username (talk) 02:56, 1 March 2011 (UTC)

• Does anyone know a bit more of history on the EFT, when and where was the first one made??? albertocv 02:31, 16 October 2007 (UNITEC) www.unitec.edu

• I'm wondering if the "Card-based EFT" section only describes debit card transactions, and should be moved to that article or better integrated with it. It would be help to clarify if it covers credit card transactions as well, and if so the description of the transaction process there needs to be better integrated with this section. -- Beland (talk) 18:39, 29 May 2008 (UTC)

I think the credit/debit nature of the account is somewhat independant of the Card-based EFT - as that's really a function of the carholders account - i.e. the network doesn't care about how the cardholder is charged, just that the transaction is authorised and cleared. That said, in certain contries, debit transactions are routed differently and attract fixed fees as opposed to the usual percentage-based fee structure of credit transactions.. But then again, this is at a per-transaction level and not at the network level. This doesn't really answer you question, I know. Maybe we should wait until there's more detailed info here before splitting it. I've written here when I can, I know UK Visa Debit card processing, so my work will reflect that - I would gladly split it out if someone can contrib any info on MasterCard or other regional schemes. --Rcalvert (talk) 21:09, 29 May 2008 (UTC)

• Spelling: UK English has been used to write the majority of the new parts. Please don't change little bits. If there are new sections that have a national bent, then regional spelling is fine. As per style guide. --Rcalvert (talk) 14:21, 8 July 2008 (UTC)

• why are Pounds used in the example for an article about an Australian and New Zealand system? 60.242.104.179 (talk) 01:43, 24 August 2008 (UTC)

• Because it's not a Australian and NZ system! There is a section that someone added for EFTPOS, but the rest of the article is for generic EFT as used in card and payment systems worldwide. --Rcalvert (talk) 11:24, 24 August 2008 (UTC)

Why does "electronic check" route to this page?

There is no mention of "electronic checks" here. Check here meaning the object, not the verb. —Preceding unsigned comment added by 24.205.228.205 (talk) 01:35, 26 July 2009 (UTC)

'Electronic check' was used as a marketing word to describe a payment method, implying a debit transaction originated by a merchant. In that context, it means the same as electronic funds transfer.

Pnm (talk) 23:24, 14 May 2010 (UTC)

Countries using EMTs

Could anyone explains how many countries in the world are using EMTs? —Preceding unsigned comment added by 95.83.208.162 (talk) 08:20, 20 May 2010 (UTC)

EMTs? --Rcalvert (talk) 12:29, 21 May 2010 (UTC)

If by EMT you mean Email Money Transfer then its a just Canada as its an old brand name for the interact service. --Sargdub (talk) 04:13, 15 July 2013 (UTC)