Funds Transfer System (FTS)
What is a funds transfer system?
An electronic funds transfer system (EFTS) is a transfer system in which money can flow from business or individual accounts without requiring paper money to change hands. Nowadays, online currency is even more significant than paper money, providing security, safety, and convenience to people all over the globe.
The electronic funds transfer transaction itself refers to a PIN-debit transaction or an online transaction.
Any Internet payment system is a special technology that allows people to make various payments on the Web. This includes the ability to pay for shop services and banks, receive salaries, withdraw money from a bank card, etc. Funds transfer systems can be of two types:
- Systems using plastic cards (or credit systems).
Such funds transfer systems use credit cards for payments. Their distinguishing feature is additional security measures in the form of encrypted messaging and digital signatures. Such funds transfer systems do not work autonomously and interact with traditional banks. The final money transfer will not be performed without the authorization of payment.
- Systems that use electronic checks and electronic money (or debit systems).
Such funds transfer systems use digital data. They do not require confirmation of a third party (bank) to complete the operation. Their advantage is a free account and independence from ordinary banks.
Electronic fund transfers quickly replace the physical ones thanks to security and speed. They begin to outnumber classical checks that were common in the banking system.