\ ˈeft How to pronounce eft (audio) \

Definition of eft

 (Entry 1 of 2)

: newt especially : the terrestrial phase of a predominantly aquatic newt
variants: or EFTS

Definition of EFT (Entry 2 of 2)

electronic funds transfer (system)

First Known Use of eft


before the 12th century, in the meaning defined above

History and Etymology for eft


Middle English evete, ewte, from Old English efete

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The first known use of eft was before the 12th century

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Last Updated

24 Apr 2020

Cite this Entry

“Eft.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/eft. Accessed 31 May. 2020.

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Financial Definition of EFT

What It Is

An electronic funds transfer (EFT) is a transaction that takes place over a computerized network, either among accounts at the same bank or to different accounts at separate financial institutions.

How It Works

EFTs include direct-debit transactions, wire transfers, direct deposits, ATM withdrawals and online bill pay services. Transactions are processed through the Automated Clearing House (ACH) network, the secure transfer system of the Federal Reserve that connects all U.S. banks, credit unions and other financial institutions.

For example, when you use your debit card to make a purchase at a store or online, the transaction is processed using an EFT system. The transaction is very similar to an ATM withdrawal, with near-instantaneous payment to the merchant and deduction from your checking account.

Direct deposit is another form of an electronic funds transfer. In this case, funds from your employer’s bank account are transferred electronically to your bank account, with no need for paper-based payment systems.

Why It Matters

The increased use of EFTs for online bill payments, purchases and pay processes is leading to a paper-free banking system, where a large number of invoices and payments take place over digital networks. EFT systems play a large role in this future, with fast, secure transactions guaranteeing a seamless transfer of funds within institutions or across banking networks.

EFT transactions, also known as an online transaction or PIN-debit transaction, also offer an alternative to signature debit transactions, which take place through one of the major credit card processing systems, such as Visa, MasterCard or Discover, and can cost as much as 3% of the total purchase price. EFT processing, on the other hand, only charges an average of 1% for debit card transactions.

Source: Investing Answers

More from Merriam-Webster on eft

Rhyming Dictionary: Words that rhyme with eft

Britannica.com: Encyclopedia article about eft

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