Electronic Funds Transfer Operator

An electronic funds transfer operator is the company that runs the switch or network through which electronic fund transfers are routed between participating banks and payment providers. Typical examples are operators of shared ATM and point-of-sale debit networks, which connect the machines and terminals of one bank to the accounts of another, and national switches that link banks for instant or interbank transfers. The operator sets technical standards, connects members, routes and authorises messages, and calculates the amounts each member owes, but settlement normally takes place in central bank money or through a settlement bank. In some countries the phrase is a legal category, and running such a system requires a licence or designation from the central bank. The role is similar to that of a payment switch and differs from that of an ACH operator, which processes batch credit and debit files.