Question

Customers that send their payments electronically directly to the billing company's bank are using

A) electronic funds transfer (EFT).
B) electronic data interchange (EDI).
C) procurement cards.
D) an electronic lockbox

Answer 1

Customers using Electronic Funds Transfer (EFT) to send payments directly to a company's bank are opting for a direct and immediate transfer from their bank account to the seller, akin to utilizing a debit card. The correct option is A.

Step-by-step explanation:

Customers who send their payments electronically directly to the billing company's bank are using Electronic Funds Transfer (EFT). An EFT is similar to using a debit card, which acts as an instruction to the user's bank to transfer funds directly and immediately from the user's bank account to the seller.

This is in contrast to a credit card, which is essentially a short-term loan from the credit card company to the user, with repayment due at a later date. EFT systems play a crucial role in a modern economy, enabling individuals and businesses to transfer funds quickly without the need to handle large amounts of cash, thus facilitating a wide range of transactions in goods, labor, and financial capital markets.