Electronic Funds Transfers Explained: Electronic Remmitances in the 21st Century

Electronic remittance is the way of the future. It’s a form of Electronic Funds Transfer (otherwise known as EFT). Doesn’t ring a bell? You’ve probably used it before already. But what exactly is ETF?

Electronic Funds Transfers

What is an Electronic Funds Transfer?

To give a technical definition, it is the electronic exchange of money from one bank account to another. This removes the need to carry exact change or cash a cheque at a later date.

So when you swipe your EFTPOS card to buy fuel, pay your power bill online via direct deposit, or remittance transfer money overseas via a service like OrbitRemit, you’re performing an EFT. It’s a bit safer because you’re not sending physical money, just secure data. It’s also very quick and easy, saving you money and headaches on administration costs.

How is Digital Technology and Remittance Software Changing This?

Technology is certainly making things easier for us to utilize electronic transfers. Take online banking smart phone apps, which allow us to transfer money to another bank account via Wifi. Many banks even allow customers to use cell phone numbers as a recipient for transfers.

Online shopping is completely reliant on an electronic transfer of funds, as it allows customers to pay instantly via credit-card or bank deposit, rather than having to post physical money or a cheque to the seller. Imagine if Amazon.com required you to pay for your goods without electronic transfer. You’d have to post or deliver the physical money yourself! What a hassle (and a risky one)!

In New Zealand, an example of innovation in EFT is Paywave, which is essentially EFTPOS without having to swipe the card or input a pin number. You simply wave the card over the machine and the money is transferred.

Where We Are Heading

Technology moves incredibly quickly. While smart phone transfers are all the rage today, this will soon be old news and new technology will take its place. In the future, we may be able to wave our smart phone or watch over an EFTPOS machine and have it transfer money to the seller. We could even get to a point where scanning a fingerprint is enough to perform electronic remittance. A fingerprint is a very safe form of identification, as it is unique and therefore hard to imitate.

It is reasonably certain that cash is slowly dying because it is such a hassle. Eventually, modern societies will stop using it all together and everything will be electronic.

OrbitRemit performs an electronic transfer for you every time you make remittance transfers overseas.