How safe are money E-Transfers
Electronic funds transfer (EFT) is the most convenient and quick way to send and receive money. Normally, they are widely used without any problem, but when the money is involved with anything – it can be a target for cybercriminals. Raising the question, how safe are money e-transfers?
This article will discuss how e-transfers work, and what can be done to ensure safe and secure e-transfers.
How Do E-Transfers Work?
We all are familiar with wire transfers, if not then read our article on Wire Transfers. So, online money transfers are the modern equivalent of wiring money. With e-transfers, you can instantly transfer funds (or data representing money) to someone else.
Typically, a transaction involves contact information such as the email address or phone number of the sender and receiver tied to the bank account. Ordinarily, online money transfers can be done for a minimal fee from secure web-based services.
The process includes:
- An online banking session is opened by a sender by specifying the recipient, the amount to send, and a security question and answer to initiate the transfer. The funds are then instantly debited usually for a fee.
- The sender also sends the security answer separately to the recipient via some other medium for security reasons.
- An email or text message containing the information on how to retrieve funds and answer the question is sent to the receiver.
The receiving party must provide the correct answer to the security question, if he/she fails to do so within a set number of times, the funds are then reverted back to the sender.
If a transfer is failed to get accepted after a certain period of time, it will not to be processed. The sender or bank decides the duration of the transfer.
In some cases, to make an e-transfer you do not need to have a bank account to send or receive money online. A credit card can be used instead which can have higher fees.
How safe are E-transfers?
E-transfer fraud – When a third party interrupts a transfer by hacking into someone’s email account and correctly guessing the answer to the security question. The hacked then deposit the money to themselves and it never reaches the intended recipient.
E-transfer scam– When people ask for money to buy a product or service or asking to donate for a cause. One excellent example of this is related to COVID-19: many scammers asked people to e-transfer money to fund testing kits, PPE, and vaccines that never got delivered.
No payment or collection system ensures 100% safety; the following safety measures ensure that electronic money transfers are much protected:
- Fraud prevention: Most e-transfer companies require you to answer the security question, verify your identity, and or provide a unique code. All these requirements ensure the safety of your fund transfer.
- Data encryption: The data is coded multiple times that ensures if the transfer is stolen or hacked on its way to therecipient, it cannot be accessed by others.
- Identity verification: If the provider asks for the verification every time you log in or logs you out automatically after a specified time, it indicates that they follow
security measures to guarantee that the money is protected throughout the process.
- Confirmation calls or emails: Various service provider offer different protection levels such as confirmation calls or emails to both the sender and the recipient to verify private information.
The e-transfer industry is regulated by several authorities that provide licenses to companies who are specialized in electronic transfers. So, it is essential to opt for reliable, licensed, and reputable money transfer companies.
What to do if you are a victim of E-transfer theft or fraud?
The first step is to contact your bank or financial institution immediately to alert them about the situation and ask if you can recover your money after being scammed online. Also, cancel your recurring payments and freeze your account so it cannot be tampered with further.
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