How Pay With an Electronic Funds Transfer

Use an electronic funds transfer (EFT) to pay for purchases or obligations. You can also use EFT to just move money between accounts, such as moving money from your account to your son's college account. Three common ways to pay using an EFT are bill payments, direct deposits and online purchases.

Bill Payments

• Most financial institutions provide online banking services to their clients. If you do not have an online account, ask your bank to set one up for you. One of the menu options in your online account will say "Pay Bills" or words to that effect. By selecting it, you will be able to set up your telephone, cable, utility and most other bill payments by selecting the appropriate payee from a list of organizations. Make sure there is enough money in the account, and specify a date and amount for each bill payment.

Direct Deposits

• Organizations save money by using EFT to pay employee salaries or process deposits, such as tax refunds. The United States Treasury estimates that EFT payments cost only 10% of check payments. Employers usually ask for a void check, or a bank authorization in lieu of a check, to process the direct deposits of salaries.

Online Shopping

• Businesses that sell online have, in addition to a listing of products and services, electronic shopping carts and checkout counters on their websites. You can load up the virtual cart with the things you need, and then use your Visa or MasterCard or PayPal or any other kind of e-wallet at the electronic checkout counter to pay for your purchase. You can then pick up the items at a physical store nearby or have them delivered directly to your home or office.

Security Considerations

• Technology has advanced to the point today that using an EFT to pay bills or make purchases is considered quite secure. Even still, be vigilant with your password and account information.