What is Electronic Fund Transfer System?
The process of sending money online within the same banking institution, across two different banking institutions, within the country or between two separate countries electronically is called the electronic fund transfer system. The money in the electronic process is sent by using computer device, internet connection on both the ends sender and receiver of the money. In the year the 1920s the company with the name Western Union Money Transfer started their credit card with some basic features. In late 1958, the Visa has introduced their credit card with advanced card features.
The saying is that need is the mother of invention; the same theory is followed while the electronic money transfer concept was introduced. There were many reasons behind the invention of the electronic money transfer system. You can easily transfer money to Sri lanka, India, Indonesia and many such countries with these fund transfer system services provided by companies like InstaReM, Xoom etc. Some more reason are discussed below
Time Consumption
This was the fundamental reason the why the need for the electronic money transfer emerged. With traditional way of sending money from one place to another place was a very lengthy process and it involves lots of time to complete. In a traditional system, the money was send either in the form of real cash of promising note such as cheque or demand draft physically which was transferred by the hand of the person. This process takes a lot of time to complete. With the help of online electronic fund transfer process, the money was transferred with less time in comparison with the traditional money transfer process.
Security
This is second but the most important reason behind the invention of the electronic fund transfer system. In traditional money transfer system, the money was sent physically which always has a fear of damage the currency note in transition. With the use of electronic money transfer system, the money is transfer from one account to another account electronically. There is no physical transition of the money in electronic fund transfer system which makes it the secured money transfer process.
Cost Effective
This is again a very crucial benefit of using electronic fund transfer method for sending and receiving money. Charges of sending and receiving money online are far cheaper in comparison with the traditional process of money transfer. The reason why sending money through electronic method is cheaper than the traditional method is that there is no physical movement of money and the person carrying the money with him or herself to handover to the authentic person.
Role of Electronic fund transfer in wiring money online
Traditionally, the movement of the money from one country to another country was costlier, time-consuming, dangerous, and risky, because it was all done physically. Later to replace the physical transition of the money from one country to another country was taken over by the concept of telegraph where the money was transferred through telegraph which is known as the wire that is why it is called wire money. Initially, the work was done by the telegraph machines which were later replaced by the computerized advanced system.
With the evolution of the internet, the concept of electronic fund transfer was evolved as the ultimate solution to the problems related to the international money transfer. In the year 1990s, the whole world has come up within the web of the internet. The electronic fund transfer method has made transferring money internationally so easy which led to increasing the international trade to an exponential level.
The base of the money wire industry is all dependent on the electronic money transfer process. Today, wire money industry has reached to the figure of trillions all around the world. It has helped the whole world to enhance the international trade.
