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Does the use of an Electronic Funds Transfer system present any risks or disadvantages for my business?

Home » Investing » Electronic Funds Transfer » Does the use of an Electronic Funds Transfer system present any risks or disadvantages for my business?

As mentioned above, EFT potentially affords business owners greater peace of mind about the security of their creditor or vendor payments. However, security issues also form one of the widely acknowledged risks of EFT. Businesses that continue to use traditional forms of payment run the risk that their checks may be stolen, but businesses that use EFT also face that risk, albeit in a different way. Most banks now use powerful encryption systems in order to ensure that the information contained in an EFT remains private, but the possibility remains that a skilled hacker may unlock that information. Although it grows less likely with continuing encryption advances, scenarios exist wherein the online accounts of a business would be open for pilfering.

It’s also important to remember that EFT systems are highly dependent upon technology and, as such, may leave you without the ability to make the quick, efficient payments to which you’ve become accustomed through EFT. Software or computer problems could disrupt your EFT system; even something as simple as a power failure could leave you without the ability to engage in EFT transactions. You might also consider the opinion of your employees with respect to EFT. One of the potential disadvantages of EFT is the removal of human interaction, or at the very least a lessening of such interaction. Whether between you and your employees, or your between your business and your vendors, the use of an EFT system will probably result in less actual contact. Accordingly, your employees or business associates may, at least initially, find themselves unwilling to accept your proposed EFT system.

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