Final answer:
The sequential process of EFT includes initiation, authorization, batching, transmission, clearing, settlement, and confirmation. Each step is crucial to ensure the efficient, accurate, and secure transfer of funds electronically.
Step-by-step explanation:
The sequential process involved in an Electronic Funds Transfer (EFT) typically includes the following steps:
- Initiation of the transfer: An individual or business requests a payment or transfer of funds electronically using a computerized network.
- Authorization: The individual or entity receiving the EFT request verifies that the initiator has the necessary funds or credit for the transaction.
- Transaction batching: Transactions are often collected in batches to be processed at specific intervals throughout the day.
- Transmission of instructions: The financial institutions involved communicate the payment details through a secure electronic system.
- Clearing: The transactions are sent through a clearinghouse that facilitates the transfer between institutions.
- Settlement: The funds are transferred from the sender's account to the receiver's account, usually on the next business day.
- Confirmation: Both the sender and receiver are notified that the transaction has been completed.
This sequence ensures that electronic payments are carried out efficiently, accurately, and securely.