Electronic Funds Transfer (EFT) is incredibly popular in Canada. At last check it accounted for 77% of total payments —that’s almost 17 billion transactions in Canada.
It’s essential for businesses to recognize this number and accept that EFT usage will continue to increase. The COVID-19 pandemic pushed digital payments to the forefront and they continue on an exponential growth trajectory.
So, what is an Electronic Funds Transfer?
An EFT is a term that describes any form of money transfer that involves electronic processing, including e-check, direct debit, direct deposit, credit and debit transfers.
Traditional EFT vs VoPay EFT
EFT usage is growing exponentially for business, however, processing through EFT using traditional methods comes with its own set of challenges. EFT payment services that are available through banks and credit unions are offered via an online banking service or through a file processing system. In both methods, the client needs to manually submit the transaction and it takes 3 to 5 business days to be cleared. Manually processing has a high risk of human error and there is zero visibility of payments through the cycle. NSF and failed transaction fees are severely costly to businesses.
See a full comparison in our previous blog.
Overcoming the Challenges
We have recognized these challenges and friction points in the processing journey and have made it our mission to combat these issues to enable EFT payments that are simple, fast and traceable. VoPay offers two types of EFT Payments including Standard EFT and Intelligent EFT (iQ11) through a developer-friendly API or online payment portal. Using Open Banking technology, our iQ11 service offers same-day EFT processing and full visibility into the lifecycle of each transaction as well as advanced bank account verification and reconciliations. Unlike traditional EFT, VoPay enables the business to verify key information about the payer including bank account, ownership or availability of funds. We are crushing barriers and moving EFT payments into the next generation. Businesses can benefit from faster transaction speeds and lower costs from either solution.
Our Top 10 Reasons
Businesses across the country are consistently impressed by how beneficial it is to their bottom line to bring their payment system into modern times. There is a myriad of reasons regarding how it helps your business; we’ve dug around and here are the top 10:
1. Control and Visibility
One of the major disadvantages of using traditional paper payments is the lack of control over the payments. Businesses spend too much time waiting on: cheques in the mail, customers reviewing invoices or credit card transaction approval. On the other hand, EFTs allow businesses to initiate payments from the customers and decide when the payment is withdrawn from the bank account. Businesses can track and view each transaction from initiation to confirmation and have access to full reporting for easy reconciliation.
2. EFT are Cost-Efficient
Most online credit card processors charge 3% on every payment. It’s beneficial to provide more ways for your customers to pay, but at what cost? VoPay charges a fixed fee per transaction, ultimately saving businesses thousands of dollars per month.
3. Flexible, Customer-Friendly Payment Options
Setting up recurring payments and deposits is quick and easy. Your customers will enjoy the convenience of making EFT payments, especially when part of a recurring payments plan. The customer only has to provide their bank account information once. Plus, future payments can be fully automated.
4. Eliminate Manual Processing
Besides the dreaded process of chasing payments, each time businesses send and receive a cheque, the accounting team must deposit it and then reconcile the cheque with the accounting software. This takes time and costs money. With automatic EFT payments, transactions are scheduled in advance and automated to relieve these burdens. Using VoPAY, businesses have the ability to integrate our payment processing API with their ERP and accounting system, so transactions are reconciled automatically.
5. Prevent Human Error
When using cash or cheques or traditional EFT, manual processing is required which has a higher risk of error. There’s a risk of human error for counting, risk of fraudulent bills and extra expense and effort for an employee to manage the money or cheque from transaction to processing, to in-person deposit at the bank. VoPay’s EFT payments have less chance of human error.
6. High-Level Security
EFT payments are sent from one bank account to another and are sitting at bank-level security. By moving money electronically businesses reduce the risk of paper cheques being lost or stolen and reduce the risks associated with cheque fraud and forgery. Our advanced technology allows clients to efficiently verify their customer’s financial accounts and transaction history, and leverage advanced data analytics to assess risk, income, fraud, and more.
7. Improve Cash Flow
Having full control over payables and receivables helps businesses with reliable predictable cash flow—making planning and forecasting more efficient. Businesses have the ability to organize payments and receivables at planned times throughout the month.
8. Reporting and Notifications
One of the most convenient benefits of using an EFT payment system is the ability to receive notifications regarding payments sent, received or rejected instantly. Businesses can also use advanced reporting capabilities to reconcile payments with ease.
9. Scale Faster
Saving costs associated with manual processing and operating expenses can have a big impact on the bottom line for a growing business. Automation and payment systems are key to scalable growth.
10. Speedy Access to Funds
Funds are usually transferred in as little as 24 hours. Most traditional credit card funding options take longer than one day.
It’s clear that the one place businesses don’t want to be—is left behind. EFT payments are the payment system of the future. In 2021, customers are clear they want ease-of-use, automation and security. Partner with VoPay to leverage an easy-to-implement solution to debit or credit Canadian bank accounts electronically. And best of all this solution mutually benefits customers and businesses.