Credit transfers is the cashless form of payment through some system. The transferring of money from one financial institution to another financial institution through electronic fund transfer known as credit transfer. It can be involving the two institutions through computer based system or can be within a single financial institution. International rules and the laws have been made for the electronic transfer.
High risk
Credit transfers system is the riskiest work which financial institutions face. In a day billions of dollars transfer through electronic transfer by the financial intuitions among themselves or with the other financial institution. These all transactions are solely for the customer, for payments, investments and other obligations in which customer required a fund transfer. This transfer is done virtually. In a single day, many financial institution do Credit transfesr that totals more than their financial worth as a company. Sometimes a single transaction is more than the total earning and financial worth of the company. Without a proper system, procedure and the secure standards financial intuitions cannot work and controls unauthorized Credit transfers.
Credit transfer procedure
Credit transfers can be either inward or outward. Outward transfer is when financial institution made the transfer after following the standard and the procedure set by the laws regulatory authorities. It includes confirming the details and verification of the details and transmission of the funds. Inward transfer doesn’t have much of a risk to financial institution as outward transfer because the final disposition of the transfer is in the hands of the recipient financial intuition. And if the money withdrawn by the unauthorized account and cashed immediately still it can be detected.
Reliability
The credit transfers is one of the most reliable and secure transfer because of the standards and procedures set by the authorities. It has to be strong for the reason that it is used for so a lot of important and large amount transaction. A credit transfer is more secure and reliable than cash transactions. It is a fast way to transfer funds. Transferring funds is relatively more secure, reliable and less time consuming than sending a bank draft by courier which is more risky and time consuming. The electronic transfer is formularized in such a way that ensures the high security of the funds transfer. It is supervise by the global commissioners that keep an eye on the transfer of the fund across different networks.
Advantages and disadvantages
Credit transfer is very quick and accurate, usually the transaction is done within minutes, and the receiver receives the correct and accurate amount sent by the sender. The transfer can be carried out online from anywhere in the world. After sending the money, the sender receives a confirmation email about the money received by the recipient. The sender and receiver do not need a bank account to send and receive funds. Advantages are more for Credit transfer than the disadvantages. The transfer can be costly and the fee of the transfer is solely dependent on the amount sent. The funds cannot be released until the confirmation of the details mention at the time of transfer made by the receiver.
