It seems as if everything is happening at a faster and faster pace, particularly in the business environment. This has created a higher demand for reliable and efficient payment methods for businesses to be able to streamline their payment processes. In today’s blog post we’ll be looking at a popular payment method – Electronic Funds Transfer (EFT). We’ll share more about what it is and the benefits of using EFTs.
What is an EFT payment?
An EFT payment, also known as electronic funds transfer, is a payment method that enables businesses to transfer funds electronically between bank accounts without the need for paper cheques. EFT payment is a secure, reliable, and cost-effective payment method that can be used for various payment purposes, including salaries, supplier payments, and customer refunds.
An EFT payment method has gained popularity in recent years, as it offers several benefits over traditional payment methods. For example, EFT payment can help businesses reduce their payment processing time, improve their cash flow, and eliminate the risks associated with paper-based payment methods.
Why should you use EFT payments for your business?
Using EFTs as a payment method has a whole lot of benefits. EFTs are often the primary payment method for many businesses. Below are some of the benefits to using EFT payments for your business:
- Improved cash flow: EFT payment enables businesses to receive payments faster, which can help improve their cash flow. With EFT payment, businesses can receive payments within a few hours, instead of waiting for several days for paper cheques to clear.
- Reduced payment processing time: EFT payment can help businesses reduce their payment processing time by eliminating the need for manual processing. EFT payment processing is automated, which means businesses can process payments quickly and efficiently.
- Cost-effective: EFT payment is a cost-effective payment method that can help businesses save money on payment processing fees. EFT payment processing fees are generally lower than paper-based payment methods, which can help businesses reduce their payment processing costs.
- Secure: EFT payment is a secure payment method that uses encryption technology to protect the transfer of funds between bank accounts. EFT payment is also more secure than paper-based payment methods, as it eliminates the risk of lost or stolen cheques.
How does an EFT payment work?
An EFT payment works by electronically transferring funds between two bank accounts. An EFT payment can be initiated by either the sender or the receiver of the funds. To initiate an EFT payment, the sender must have the receiver's bank account details, including the bank name, routing number, and account number.
Once the sender has the receiver's bank account details, they can initiate the EFT payment through their bank's online banking platform or app, or through a third-party payment processor. When sending the money you need to make sure you have the receiver's bank account details, the amount of the payment, and any other necessary information. You need to get this right the first time as it isn’t possible to reverse or cancel an EFT payment once it has been initiated.
Once the EFT payment is initiated, the funds are transferred from the sender's bank account to the receiver's bank account electronically. The processing time for EFT payments can vary depending on the banks involved in the transaction. Generally, EFT payment processing time can take between 1-5 business days.
Can you make an EFT payment with any bank?
The short answer is yes, EFT payments can be made with any bank. An EFT payment is a standardised payment method that is supported by all banks that offer electronic banking services. EFT payments are regulated by the Automated Clearing House (ACH) network, which is a secure and reliable network that facilitates electronic payments between banks.
When making a payment via EFT, you will need the banking details of the business or individual that you’ll be sending money to. Once you have all the details, you can initiate the payment through your bank’s online banking platform or app or through a third-party payment processor.
Once your payment has been initiated, your bank will communicate through the ACH network with the bank of the person receiving the money. The ACH network ensures that the funds are transferred securely and efficiently between the two banks. The processing time for EFT payments can vary depending on the banks involved in the transaction, but as mentioned previously, it typically takes between 1-5 business days. If you’re transferring money to an individual or business who banks with the same bank as you, this process will be much faster, if not immediate.
Tips when making EFT payments
Below are some tips to help you make your EFT payments more efficiently:
- Verify bank details: Make sure you have the correct bank details of the person or business you’ll be paying before you initiate the payment. Verify the bank name, routing number, and account number to ensure that the funds are transferred to the correct account.
- Double-check payment amount: When making a payment via EFT, make sure you enter the right amount. Once the payment is already processed, it can’t be cancelled or reversed.
- Keep track of EFT payments: It is essential to keep track of all the EFT payments you make, including the payment amount, date, and recipient. This will help you reconcile your bank statements and ensure that all payments are processed correctly.
EFT payments are a secure, reliable, and cost-effective payment method that can help businesses improve their cash flow, reduce payment processing time, and eliminate the risks associated with paper-based payment methods. EFT payments are and can be used for various payment purposes, including salaries, supplier payments, and customer refunds. By using EFT payment as their primary payment method, businesses can streamline their payment processes and focus on their core operations.
Open a business account with wamo in just 10 minutes and start making EFT payments
At wamo we don’t believe in making things harder than they need to be, quite the opposite! Opening a business account with a traditional institution can take more time and money than you want to spend, but at wamo it is a fast and easy process that you can do online from anywhere.
As a financial management service provider and a payments platform in one, wamo is much more than a bank and operates differently to the traditional banks you know. The features and services we offer are designed specifically for small businesses and entrepreneurs to meet their specific needs and to provide human-centred support at every step of the way!
If you choose to open a business account with wamo, you can download wamo Business from Google Play or the App Store. Or you can also open an account from the website. wamo can be used from your smartphone via the app or from your desktop via the webapp, whatever works best for you.
You’ll be taken through a series of simple steps when you register, where you’ll need to share some basic information about you and your business. Next we’ll need to verify your identity, but don’t worry, we won’t be using your data for anything other than verifying that you are who you say you are. Security is our top priority.
Lastly, you’ll choose your subscription plan that will best suit your business. If you have a big team, for example, having free virtual and physical debit cards as and when you need them makes it worth opting for the higher monthly subscription amount, easily covering this cost every time.
Read more about wamo’s subscription plans.
If you have the right documents ready (see below) you’ll be able to whizz through the registration process in under 10 minutes (we’ve timed it!). We’ll get back to you within 24 hours and, if everything is in order, you’ll have a fully-functioning account ready for business immediately. You can then:
- Order wamo business Visa debit cards - get up to 10 for you and your team and more on request.
- Instantly create and use virtual debit cards
- Open multiple sub-accounts with either EUR or GBP IBANs
- Take advantage of wamo Rewards perks and special offers
And so much more!
What documents do I need to open a business account with wamo
Depending on where you’re located and the type of business you run, the requirements for opening an account might vary a bit. But, in general, you’ll need to provide the following documents to open a business account with wamo:
- Memorandum and Articles of Association (M&A)
- Proof of shareholder structure
- Proof of company address
Not necessary, but could be required at a later stage
- Registry extracts
- Certificate of Incorporation (COI)