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Simple English definitions for legal terms
funds transfer
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A quick definition of funds transfer:
Funds transfer is when one person or company sends money to another person or company. This is done through computerized banking systems, where the payment order is sent from the sender's bank to the receiver's bank. The process ends when the receiver's bank receives the final payment order. There are different rules for commercial or wholesale funds transfers and consumer funds transfers. Commercial funds transfers are governed by Article 4A of the UCC, while consumer funds transfers are regulated by the federal Electronic Funds Transfer Act.
A more thorough explanation:
Definition: Funds transfer refers to the process of transferring money from one person or entity to another. This can be done through a series of transactions between computerized banking systems, starting with the payment order from the sender and ending with the receipt of the payment by the recipient's bank.
For example, if you need to pay your rent, you can transfer the funds from your bank account to your landlord's bank account using a funds transfer. This can be done online or through a mobile app, and the money will be transferred electronically from your account to your landlord's account.
Another example is when a company needs to pay its suppliers for goods or services. The company can use a funds transfer to send the payment directly to the supplier's bank account, without the need for a physical check or cash.
These examples illustrate how funds transfer can be a convenient and efficient way to make payments, especially for businesses that need to make large or frequent payments to suppliers or employees.