As wire transfer and EFT (electronic fund transfer) are related to one another, it is a good to know the difference between wire transfer and EFT. Both wire transfer and EFT mainly involve the transferring of money and/or funds from a person/business to the other. These two systems are used daily in different establishments around the world such as hotels, air planes, ticket booths, restaurants and many others.
What is Wire Transfer?
Wire transfer is a type of electronic fund transfer where going to the bank and filling up withdrawal slips or deposit slips is not necessary. All the transactions in a wire transfer are done electronically through the international banking network; hence the name wire transfer. Using bank wire transfer, fund can be transferred from one account to another electronically or on line. This is the fastest way to transfer money from one account to another. If the recipient’s account is registered or fund transfer to that account has been taken place previously, the fund transfer is immediate. Otherwise too the fund transfer is the fastest. It is also secure because the fund transfer is between two identified accounts.
What is EFT (Electronic Fund Transfer)?
The process wherein funds (money) are transferred electronically via a computer system is called EFT or Electronic Fund Transfer. The transaction may take place within the same bank or financial institution, or across different banks. Common examples of EFT that one may have encountered already are credit cards, debit cards, electronic bill payments, wire transfers, direct debit, etc. EFT is beneficial in a way that when money is being transferred to another country, the currency is automatically calculated and converted.
What is the difference between Wire Transfer and EFT?
Wire transfer and EFT are two popular methods of financial transaction that are used in the world today. However, it is useful to know the difference between wire transfer and EFT when choosing the transferring method that suits one’s requirements best.
Wire transfer is like transferring funds virtually since it does not involve the actual money itself. EFT is the process of wire transfer, or in other words, wire transfer is one of the many concepts that uses electronic fund transfer. Wire transfer is a mode of transferring fund from one account to another while EFT is any fund transfer that is done electronically including credit/debit cards and other online banking facilities.
Summary:
Wire Transfer vs EFT
• EFT is the process of transferring funds electronically whereas wire transfer is the act of transferring funds from one account to another.
• Wire transfer is bank-to-bank transaction and more useful and convenient for fund transfers internationally while EFT, in addition to wire transfer, is also suitable for domestic transactions like paying for bills, groceries and other merchants.
Photos By: Yongho Kim (CC BY-SA 2.0)
Further Reading:
- Difference Between ACH and Wire Transfer
- Difference Between ACH and EFT