ELECTRONIC TRANSFER OF FUND – Benefits & Limitation

Electronic payment is an innovative mode of payment to suppliers, subcontractors, others etc. by exploring the capability  of internet and online banking .Electronic payment method fully wipe out the traditional cheque printing and cheque signing method. Electronic payment otherwise we can termed as ‘’Paper less payment‘’

Benefits  of Electronic payment

Some of the important benefits of electronic fund transfer are mentioned below:-

1)   Paperless payment

 Electronic payments are paperless payment so no need to file and keep the paper documents  in the office, instead  can keep all documents in digital format and  can save the office file storage space.     

2)    Quick payment

Distribution of payment is very easy and quick. Because when the payer  initiate and  approve the payment then in the same time the money transferred from the payer bank Account to the payee bank Account and relevant supporting documents of payments are also transferred to payee’s email id as reference.

3)   Better control

In electronic payment, the payer can fix various levels of apparoval such as 1^st approval.2^nd approval, final approval, final release of fund etc. hence payer can exercise better control over payments.

4)   Time saving

Once the payment is approved by the payer , then the same time the  fund will  transfer to the payee’s bank Account. so no required to come and collect the cheque from the payer and deposit in  to bank. Likewise  electronic payment save  the time of  cheque collection and deposit in to bank Account.

Limitations of Electronic Fund Transfer

Some of the important limitations of electronic fund transfer are mentioned below:-

1)   Costly method of payment

Good computers , high speed internet facility and e-banking facility are basic requirements to carry out electronic transfer of funds. That means to get the facility of electronic transfer requires some investment for basic needs so it is costly.

More over bank would charge some additional amount as online banking charges and electronic   fund transfer charges from the payer. So it’s cost comparatively high than the traditional cheque method.

   

2)   Computer & Internet knowledge required

The staff who handling electronic fund transfer require good computer and internet knowledge to carry out the electronic fund transfer.

3)   Technical Fault

 When any technical fault happens on internet, e-banking facility,etc, then electronic transfer is not possible.