EFT — Electronic Funds — Transfer

Electronic Funds Transfer (EFT)

EFT - Electronic Funds - Transfer

An electronic funds transfer (EFT) allows payment between two parties by using electronic signals to transfer money. The current systems of electronic funds transfer began in the 1960s but became widespread in the 1970s with the introduction of the automatic teller machine (ATM). Since then, EFT has become commonplace, with millions of transactions taking place every day.

How Does Electronic Funds Transfer Work?

When an individual or institution initiates an electronic funds transfer, signals are sent from the terminal via 128-bit encryption. This is a highly secure method of securing sensitive data through the internet to the receiving unit. 

Within the data is the information about the transfer, including: the account number, account holder name, institution data, and the transfer amount. When the receiving terminal verifies the data, the transfer is complete.

Examples of EFTs

EFTs are part of modern life and most people use EFTs daily without thinking about them. You can even use EFTs to pay your taxes and receive refunds through direct deposit. 

Throughout any given day, you’ve probably used some – or all – of these types of EFTs:

  1. Automatic teller machines (ATMs)
  2. Payroll direct deposit
  3. Direct payments from buyers to businesses
  4. Electronic bill payments 

Perhaps your paycheck is directly deposited into your bank account . You go to the bank to withdraw cash for your weekly grocery shopping trip and use the ATM, but when you go to the store checkout, you’re $20 short, so you use your debit card. When you get home, you pay your bills on your computer. 

How Long Does an Electronic Fund Transfer Take?

EFTs typically process between 1-4 business days, but holidays and weekends can delay the transfer. The actual time for the transaction depends on the type of payment, EFT provider, and when the request is submitted. 

Are EFTs Free?

There is a cost to process EFTs, but whether the sender or the receiver bears the cost depends on the transaction type. Some banks charge ATM fees, for example, while others include it in the service fees for their customers' accounts.

What Is the Electronic Funds Transfer Act?

In 1978, the United States government issued the Electronic Funds Transfer Act (EFTA), which established the definition of EFT and requirements for disclosure. The Act set forth the rights and responsibilities of both consumers and financial institutions when sending and receiving EFTs.

  The Electronic Funds Transfer Act authorized: ●      24 hours ATMs ●      ATM fees●      Direct deposit of paychecks●      Pay by phone●      Internet banking●      Debit cards●      Electronic check conversion Rights Under the Electronic Funds Transfer ActThe EFTA sets standards for consumers’ rights when they transfer electronic funds. The Act specifies that financial institutions and third parties must include the contact information for the persons who should be notified in the event that consumers see an unauthorized transaction on their account (as well as the process for reporting such an event). It also sets forth liability for all parties regarding unauthorized transactions and transfers. 

Financial institutions and third-party agents involved in the transfer of funds must disclose the type of transfers consumers can make, as well as any limitations or fees associated with the transfers. They must also provide consumers with a summary of their rights, including the right to request point of purchase receipts, transaction confirmations, and statements.

Institutions are mandated to disclose how they collect information from consumers, and if they share it with any other entities. Institutions are also required to provide consumers with the timeframe for reporting errors, how to file such reports, and how to request more information.

Ask the Expert

InvestingAnswers is on a mission to help consumers build and protect their wealth through education. That’s why we have experts answering your pertinent financial questions at the end of every article.

Are electronic funds transfers and wire transfers the same thing?

A wire transfer is the digital transfer of money from one individual or business to another. With a wire transfer, the receiving party must supply their bank account information to the sender who then begins the transmission. A unique number called the IBAN/SWIFT code must be provided by the receiver so that the sender can transfer the money to the correct financial institution. 

Are electronic funds transfers safe?

EFTs are an extremely safe and time-tested method of transferring money. The system uses 128-bit SSL encryption to scramble the information and produce new combinations of data that is unscrambled at the receiving end.

128-bit SSL encryption renders 1 million unique combinations, which would be impossible for the average hacker to guess.

Even with computerized «brute force» attacks, it’s estimated that this would take several years to 'crack the code.'

Is EFT the same as ACH?

ACH stands for Automated Clearing House and is a type of EFT. It is the process of moving funds electronically from one bank account to another. EFT includes ACH, as well as other means of transferring money electronically (e.g. online bill pay systems, credit card use, ATMs).

Источник: https://investinganswers.com/dictionary/e/electronic-funds-transfer-eft

EFT Payments — The Guide to Electronic Fund Transfers

EFT - Electronic Funds - Transfer

Today, commerce is relying more and more on electronic communications to handle financial transactions efficiently and affordably. For this, businesses are turning to electronic fund transfer system (EFT) networks to initiate and process payments using the Internet.

What is an EFT Payment?

EFT is an umbrella term that describes a variety of electronic payments, including wire transfers and automated clearing house (ACH) transfers. Together, they present a modern-day solution for an age-old problem: sending fast and reliable payments on time.

According to the U.S. Bureau of the Fiscal Service, in FY2018 over 99.5% of government-wide salary payments and allotments were facilitated via EFT. Similarly, about 84% of total tax refund payments were issued using EFT systems in the United States.

For millions, EFT networks allow 24-hour access to their cash and a more convenient and efficient means of accessing their account information. However, today, EFT is preparing business owners for the economy of tomorrow by providing them with faster, safer, and more reliable methods of issuing B2B payments.

The History of the EFT: A Primer

The electronic fund transfer (EFT) industry first emerged in the 1960s with the arrival of the automated teller machine (ATM). The ATM leveraged new telecommunications technology to facilitate account transfers, deposits, cash withdrawals, and more using a magnetic stripe card and a personal identification number (PIN).

The advent of ATM networks brought global finance into the EFT era. In the proceeding years, EFT networks grew rapidly across the United States following a 1985 Supreme Court decision that upheld an earlier Court of Appeals decision that found ATMs do not represent bank branches.
Consequently, interstate EFT networks quickly spread throughout the country.

Fast forward to the 21st-century and now countless merchants, vendors, government agencies, and even individuals use EFT networks to send and receive money. Whenever debit cards, direct bank deposits, or e-Transfers are used to facilitate a transaction, an EFT network is used.

In other words, EFT networks are the backbone of the modern B2B payment processes and the peer-to-peer economy.


Whenever a discussion arises regarding EFT accounting, the conversation immediately steers toward the automated clearing house (ACH) network.
For those wondering what an ACH payment network is, an ACH definition refers to a computerized exchange between participating financial institutions banks and financial services companies.

There is no clear difference between ACH and EFT, mostly because they are, in a sense, one and the same. You can think of ACH transactions to be a subcategory of EFTs, where some EFT payment processes are built on top of an ACH infrastructure.

In this sense, an ACH transfer or ACH direct deposit is a type of EFT in which payments are sent through the Automated Clearing House network for authentication purposes.

At a glance, ACH and EFT are similar in that they both involve sending payments electronically from one network node to another. However, EFT is a broader term that encapsulates several methods of payment, including debit cards, credit cards, and POS transactions.

Today, all major U.S. financial institutions, including JPMorgan Chase, require all external accounts to support ACH transactions to facilitate EFT billing.

It’s clear that ACH and EFT are, in fact, not in opposition to one another. Rather, you can define ACH payment or an ACH transfer as merely a type of EFT that is leveraged across a variety of industries for its security and low fees which, initially, were designed to replace physical check payments.

Types of EFT Payments

There are several ways that you can send money electronically. Here are a few of the most common types of EFT payments that are used in business finance.

  • Electronic Checks: An electronic check is, as the name suggests, the electronic equivalent of a standard paper check. Using a bank account number, ACH trace number, and routing number, the e-check can transmit encrypted data to make EFT deposits.
  • Debit Charges: A debit charge is a type of EFT payment that uses a physical debit card issued by a bank or credit union to move money from one account to another. They can be used with a POS system, over the phone, or online.
  • ATMs: ATMs are a type of EFT banking that allows bank account holders to access their funds remotely without interacting with a physical teller. At an ATM, located either at a bank or a white-label ATM station, account holders can withdraw cash, make deposits, or transfer funds.
  • Personal Computer Banking: Today, personal computer banking represents a major share of the total online banking transaction volume. Personal computer banking allows users to make transactions with a PC, tablet, or mobile device connected to the Internet.
  • Wire Transfers: A staple of the EFT network, wire transfers are a fast and efficient means of sending money for large, high-value payments. Wire transfers are often used to make down payments on physical assets real estate.
  • Direct Deposit: A direct deposit is the electronic transfer of a payment directly from one account (usually the employer) to the receiver’s account (usually the employee). Direct deposits are facilitated via a direct deposit service provider who, after running payroll, authorizes deposits into each employee’s account.

In sum, EFT transactions, across their many forms, make up the electronic banking industry. Each of the above EFT payment types share one common element—they are all connected to the ACH network, a secured electronic system that links all U.S. banks and financial institutions.

It should be noted, however, that not all EFT transaction types carry equal fees. To make an informed decision about which to use, all ACH-connected account holders should check the EFT details provided by their financial institution.

They may be surprised to find that EFT fees tend to vary by location and transaction method.

How Long Does an EFT Take to Process?

In an increasingly competitive and fast-moving global market, the need for reliable and efficient payment processing is constant. In an accounts payable department, there is often little time to spare for pen and paper payments, lengthy processing times, and other delays.

Instead, business owners can leverage EFT technologies to pay vendors and suppliers via direct deposit. We’re often asked, “how long does EFT take?” The answer, for most accounts payable departments, is seconds.

Compare this to the hours it may take to print a check, stuff it in an envelope, dig around for a stamp, and rush it to the post office.

Assuming the check clears the bank, it may take several days for the process to finalize from end-to-end.

Knowing this, many accounts payable offices are migrating to automated EFT solutions to replace paper checks and outdated, delay-inducing postage. At AvidXchange, we offer a host of full-service bill payment methods via our software to help bring business accounting systems into the 21st century.

How Does It Work?

Instead of selecting payments for print, with an EFT-based accounts payable you simply select to pay. With the click of a button, business owners can trigger payments electronically. Once submitted, payments are sent to the E-Payment Application portal where the payment files are routed to approvers before finally being issued to vendors.

From there, payments are debited from the payer’s account to a secured trust account. The payer’s account then becomes a system of record, storing and hosting all files needed for reconciliation.

The Benefit of EFT Payment Systems

There are several key benefits that accounting departments and business owners can derive from EFTs. First among them is that an EFT transfer is an economical choice—in terms of both saving time and money. However, there are a host of other advantages available to EFT users, including:

  • No physical postage required
  • No check cashing costs incurred (saving up to $1 per issue)
  • Speedy, near-instant processing time
  • Fully encrypted with SSL 128-bit data
  • Easy to track

The main advantage lies in the superiority of EFT and ACH processing time. Un manual pen-and-paper accounts payable, e-payments are near-instantaneous and can often be sent for free or for a low fee comparable to the price of a postage stamp. This makes EFT a can’t-lose solution for those stuck on dated, manual payment processing systems.

Whether you’re a business or supplier, you understand the frustration of late payments and slow, laggy payment processing. An accounts payable cycle that is held back by late payments can result in serious issues for any business, including:

  • Mounting late fees
  • Fractured relations with suppliers
  • Disrupted workflows
  • Cash flow shortages

Late repayments constitute one of the leading causes of poor supplier relationships and piling debts. Fortunately, the EFT payment method circumvents this issue by providing an efficient and cost-effective means for sending and receiving payments electronically.

Creating a Secure, Efficient Accounts Payable

By leveraging the power of EFT payments, including wire transfers or ACH, businesses can modernize their check writing experience. Paying with ease has never been simpler thanks to the secure, automated EFT technologies available to forward-focused accounts payable offices.

The latest payment automation software reduces risk, saves time, and eliminates the hassle of postage. It’s no wonder, then, that so many businesses are making the switch and migrating to an electronic payment processing system to improve the timeliness of their transactions.

Источник: https://www.avidxchange.com/blog/eft-payment/

Electronic funds transfers

EFT - Electronic Funds - Transfer

If you are a financial entity, a money services business or a casino, you will have to report certain electronic funds transfers (EFTs) to FINTRAC.

Please note that as of January 1st, 2015, all EFT reporting will be done through a Shared Reporting Process that allows reporting of EFTs simultaneously to both FINTRAC and the CRA.

SWIFT electronic funds transfers

This reporting requirement is only applicable to you if you are a financial entity or a money services business and you send or receive EFTs made at the request of a client by transmission of a SWIFT MT 103 message, as a SWIFT member, through the SWIFT network. SWIFT means the Society for Worldwide Interbank Financial Telecommunication. It is a co-operative owned by the international banking community that operates a global data processing system for the transmission of financial messages.

You have to report the following transactions to FINTRAC:

You send an outgoing SWIFT MT 103 message for $10,000 or more outside Canada at the request of a client in the following manner:

  • in a single transaction; or
  • in two or more transfers of less than $10,000 (that total $10,000 or more) if your employee or senior officer knows they were made within 24 consecutive hours of each other by or on behalf of the same individual or entity (24-hour rule).

You receive an incoming SWIFT MT 103 message for $10,000 or more sent from outside Canada at the request of a client in the following manner:

  • in a single transaction; or
  • in two or more transfers of less than $10,000 (that total $10,000 or more) if your employee or senior officer knows they were made within 24 consecutive hours of each other by or on behalf of the same individual or entity (24-hour rule).

These reports can only be made electronically using the batch file reporting mechanism (See Guideline 8B: Submitting SWIFT Electronic Funds Transfer Reports to FINTRAC).

You do not have to make an EFT report if you send a transfer to an individual or an entity in Canada, even if the final recipient is outside Canada. Similarly, you do not have to make an EFT report if you receive a transfer from an individual or an entity in Canada, even if the original sender was outside Canada.

Guidance on Tag :50: (Ordering Customer)
of the SWIFT Electronic Funds Transfer Report

As per paragraphs 12(1)(b) and 12(1)(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing (PCMLTF) Regulations, financial entities are required to report the sending Canada and the receipt from outside Canada, at the request of a client, of an electronic funds transfer (EFT) of $10,000 or more in the course of a single transaction. This report must contain, among other things, the following information on the client ordering the payment of the EFT (i.e., tag :50:) referred to in Schedules 2 and 3 of the PCMLTF Regulations:

  1. Client's full name;
  2. Client's full address;
  3. Client's account number, if applicable.

Although the Society for Worldwide Interbank Financial Telecommunication (SWIFT) allows its members to choose between three options to fill out tag :50:, i.e., options A, F and K, only options F and K do provide the information that is mandatory for these reports.

Given option F can also contain information that is not set out in Schedules 2 and 3, if your financial entity sends out or receives a MT 103 message in which option F was used, we recommend that you follow these guidelines when providing information to FINTRAC:

  1. When subfield 1 (Party Identifier) is used with the (Code)(Identifier) format, you should provide one of the following codes followed by the «/» character:

    ARNU Alien Registration Number CCPT Passport Number CUST Customer Identification Number DRLC Driver's License Number EMPL Employer Number IBEI International Business Entity Identifier (no country code allowed) NIDN National Identity Number SOSE Social Security Number TXID Tax Identification Number CORP Corporate Identification, that is, Identification Number of the Customer in a Corporation: OTHR Other identification

    However, DO NOT provide the values that follow the «/»» character. Please space-fill the remainder of the tag.

  2. For subfield 2 (Name & Address), you should only provide the following codes on the lines:

    • Name of the ordering customerThe number followed by a slash, '/' must be followed by the name of the ordering customer (where it is recommended that the surname precedes given name(s)).
    • Address Line The number followed by a slash, '/' must be followed by an Address Line (Address Line can be used to provide for example, street name and number, or building name).
    • Country and TownThe number followed by a slash, '/' must be followed by the ISO country code, a slash '/' and Town (Town can be complemented by postal code (for example zip), country subdivision (for example state, province, or county).

    DO NOT provide other codes such as:

    • Date of Birth The number followed by a slash, '/' must be followed by the Date of Birth in the YYYYMMDD format.
    • Place of BirthThe number followed by a slash, '/' must be followed by the ISO country code, a slash '/' and the Place of Birth.
    • Customer Identification NumberThe number followed by a slash, '/' must be followed by the ISO country code, a slash, '/', the issuer of the number, a slash, '/' and the Customer Identification Number.
    • National Identity NumberThe number followed by a slash, '/' must be followed by the ISO country code, a slash, '/' and the National Identity Number.
    • Additional InformationThe number followed by a slash, '/' is followed by information completing the Identifier provided in subfield 1 (Party Identifier) used with the (Code)(Identifier) format.

If you receive the following SWIFT message:

:50F:ARNU/XR123414 1/JOHN SMITH 2/123 MAIN STREET 4/19640829


You should provide the aforementioned message to FINTRAC in the following format:



If you receive the following SWIFT message:

:50F:CCPT/GB/123456789012345 1/JOHN SMITH 2/123 MAIN STREET


You should provide the aforementioned message to FINTRAC in the following format:



If you receive the following SWIFT message:

:50F:NIDN/SE/1234567890124567 1/JOHN SMITH 2/123 MAIN STREET 7/SE/1234567890124567

You should provide the aforementioned message to FINTRAC in the following format:



Your reporting obligations regarding EFTs also include sending or receiving EFTs by any means, as explained in the following.

Non-SWIFT electronic funds transfers

This reporting covers EFTs that are the transmission of instructions for a transfer of funds through any electronic, magnetic or optical device, telephone instrument or computer other than SWIFT MT 103 messages described above.

If you are a financial entity, a money services business or a casino, you have to send a report to FINTRAC for the following transactions:

  • You send outgoing EFTs. These are instructions sent electronically for the transfer of $10,000 or more outside Canada at the request of a client in the following manner:
    • in a single transaction;
    • in two or more transfers of less than $10,000 (that total $10,000 or more) in the following 24-hour rule situations:
      • if you are an entity, your employee or senior officer knows the transfers were made within 24 consecutive hours of each other by or on behalf of the same individual or entity; or
      • if you are an individual, you know the transfers were made within 24 consecutive hours of each other by or on behalf of the same individual or entity.
  • You receive incoming EFTs. These are instructions sent electronically for transfer of $10,000 or more from outside Canada at the request of a client in the following manner:
    • in a single transaction;
    • in two or more transfers of less than $10,000 (that total $10,000 or more) in the following 24-hour rule situations:
      • if you are an entity, your employee or senior officer knows the transfers were made within 24 consecutive hours of each other by or on behalf of the same individual or entity; or
      • if you are an individual, you know the transfers were made within 24 consecutive hours of each other by or on behalf of the same individual or entity.

Why Will Reports Be Sent To The CRA?

  • In the 2013 Budget, the Government of Canada announced measures to strengthen the ability of the Canada Revenue Agency (CRA) to combat international aggressive tax avoidance and international tax evasion. One of those measures called for the reporting of international electronic funds transfers (EFTs) of $10,000 or more to the CRA, for use in the administration of the Income Tax Act, Excise Tax Act, and the Excise Act, 2001. Starting on January 1st, 2015, reporting entities that currently have an obligation to report EFTs to FINTRAC under the Proceeds of Crime Money Laundering and Terrorist Financing Act (PCMLTFA) will also be reporting to the CRA when they report EFTs using the Shared Reporting Process.

Shared Reporting Process

  • WHAT IS THE SHARED REPORTING PROCESS? The Shared Reporting Process will allow reporting entities to send Electronic Funds Transfers (EFT) reports simultaneously to both FINTRAC and to the CRA.
  • WHY WAS THIS PROCESS DEVELOPED? Because reporting obligations are the same under the PCMLTFA and the ITA, FINTRAC and the CRA worked together to develop this process to reduce the burden on entities that have existing obligations to report Electronic Funds Transfers (EFT).
  • WHAT IS FINTRAC'S ROLE? FINTRAC will continue to manage the existing reporting channels, and will still provide user support for reporting entities. Users will still enroll only with FINTRAC for both the Web application and for the use of the batch reporting software.

Reporting obligations

  • WILL MY REPORTING OBLIGATIONS TO FINTRAC CHANGE? Reporting Entities' obligations will remain the same. All REs will have to send the same EFT reports to FINTRAC as before; those EFT reports will also be sent to the CRA through this process. This reporting is done through the creation of a new shared component of existing reporting channels (F2R and batch reporting).
  • ARE OTHER REPORTS AFFECTED?   There will be no change to any other report type submitted to FINTRAC. Only EFTRs will be part of the Shared Reporting Process.
  • WHAT ABOUT REPORTING ON PAPER?   If you do not have the technical capability to report EFTs electronically, you may use FINTRAC's paper form to report. However, EFTRs submitted on paper will not be sent to the CRA. You must fill out the CRA's own form (see link below) to report EFTs to the CRA on paper. 
  • WILL THE CRA BE GETTING MORE INFORMATION THROUGH THIS PROCESS? No. The CRA will not receive other reports through the Shared Reporting Process. It should also be noted that the CRA will not have access to FINTRAC's database or other information through the SRP.

Additional information about electronic funds transfers

There is an exception to the 24-hour rule explained above for an EFT with more than one beneficiary. For additional information about this as well as timeframes, means of reporting, EFTs in foreign currency and other requirements associated with EFTs, consult Guideline 8: Submitting Electronic Funds Transfer Reports to FINTRAC.

Date Modified: 2020-04-27 

Источник: https://www.fintrac-canafe.gc.ca/reporting-declaration/info/rptEFT-eng

Sending and Receiving EFT Payments: What You Need to Know

EFT - Electronic Funds - Transfer

You constantly make payments to contractors, suppliers, vendors, and employees (if you have ‘em). It’s what you do as a business owner. Wouldn’t it be nice to skip cash and checks? Instead of using paper to pay people, you can make EFT payments.

EFT stands for electronic funds transfer. In business, you can send—and receive—EFT payments to streamline the payment process. Read on to learn more about what is EFT payment and how you can use it in your business.   

What is electronic funds transfer?

An electronic funds transfer moves money from one account to another electronically over a computerized network. EFTs require both the sender and recipient to have bank accounts. The accounts do not have to be at the same financial institution to transfer funds. Both individuals and businesses can make EFT payments over the computer, using card readers, or over phones.

EFTs debit (increase) one person’s account and credit (decrease) the other person’s account. 

EFT transactions are also known as electronic banking. Everything is paperless, so there isn’t a need for cash or paper checks. 

The Electronic Fund Transfer Act (EFTA) regulates electronic funds transfers. The EFTA is a federal law that protects individuals who make EFT payments. For example, the EFTA requires financial institutions to provide consumers with a summary of rights and notifications of unauthorized transactions. 


You might be wondering what the difference between an EFT and ACH (Automated Clearing House) payment is. 

ACH is a type of EFT. So, all ACH transactions are types of electronic funds transfers, but not all electronic funds transfers are ACH transactions. 

Electronic funds transfers include all types of electronic payments. On the other hand, an ACH payment is made within the Automated Clearing House Network (e.g., payroll and direct deposit). 

For example, wire transfers are not ACH transactions. Instead, a wire transfer is a type of EFT transaction. 

Types of EFT 

There are a number of ways to transfer money electronically. Here are just some common EFT payments you might use for your business.

Direct deposit lets you electronically pay employees. After you run payroll, notify your direct deposit service provider of the amount to deposit in each employee’s bank account. Then, the direct deposit provider transfers that money to employee accounts on payday. Not all employers can make direct deposit mandatory, so brush up on direct deposit laws.

Wire transfers are a fast way to send money. They are typically used for large, infrequent payments (because there’s a fee). You might use wire transfers to pay vendors or make a large down payment on a building or equipment.

The Electronic Federal Tax Payment System (EFTPS) is a tax payment service you can use to make tax payments to the IRS.

ATMs let you bank without going inside a bank and talking to a teller. You can withdraw cash, make deposits, or transfer funds between your accounts.

Debit cards allow you to make EFT transactions. You can use the debit card to move money from your business bank account. Use your debit card to make purchases or pay bills online, in person, or over the phone. And, you can accept debit card payments from customers. 

Electronic checks are similar to paper checks, but they are used electronically. You enter your bank account number and routing number to make a payment.

Mobile wallets let you pay bills, transfer money between accounts, or receive payments over the phone.

Personal computer banking lets you make banking transactions with your computer or mobile device. You can use your computer or mobile device to move money between accounts.

How does an EFT payment work? 

You might want to send an EFT payment to someone. Or, you may give customers the option to pay you via an electronic funds transfer. 

To make an EFT payment, the sender must know the recipient’s bank account information. If you’re making an EFT payment, you must authorize the funds transfer. Then, the money is taken from your account and deposited into the recipient’s account. 

There might be a fee for some EFT transactions. For example, you might have to pay for certain ATM transactions. However, other transactions might be free.

EFT payment processing time

The amount of time needed to process an EFT payment depends on:

  • The type of payment
  • Your EFT provider
  • When you submit the payment

Your EFT payment might take anywhere from one to four days. Some electronic funds transfers are sent and received on the same day (e.g., wire transfers). 

EFT payments typically only process on business days. And, there might be certain cut off times. For example, you might need to make an electronic money transfer before 9 p.m. If you place the transaction after that time, the transaction won’t begin until the next business day.

Can you stop an EFT payment?

Normally, you cannot stop an EFT payment after you initiate it. The EFTA does not give you the right to do so. If you need to stop a payment or have your money refunded, that is between you and the person you paid.

However, you might be able to stop scheduled, recurring EFT payments (e.g., scheduled utility EFTs). You can stop an upcoming scheduled payment by notifying your financial institution at least three business days before the next scheduled transfer takes place. 

Follow your financial institution’s policies for stopping scheduled transfers. Otherwise, your stop might be void. Your state might also have additional regulations, so be sure to check your state laws. 

Keep track of all your electronic payments by recording them in easy-to-use accounting software. When you use Patriot Software’s accounting software, you can see a full picture of your business’s financial health. Sign up and start your free trial!

This article was updated from its original publication date of 9/11/2012. 

This is not intended as legal advice; for more information, please click here.

Источник: https://www.patriotsoftware.com/blog/accounting/what-is-electronic-funds-transfer-eft/

EFT vs ACH — The difference between EFT Payments and ACH

EFT - Electronic Funds - Transfer

ACH and EFT payments are both types of electronic payments. The difference is that ACH is a type of EFT (electronic funds transfer) payment. ACH stands for the Automated Clearing House and is the process of moving funds from one bank to another. EFT payments are an umbrella term that include ACH payments, wire transfers, and all other types of digital payments.

What are EFT Transfers & Payments?

EFT stands for Electronic Funds Transfer and is the process of electronically moving funds from one bank account directly to another without the involvement of bank employees. Since the transfer is done completely online, no paper money is needed. The EFT can happen between accounts within one bank, or between accounts across multiple banks.


EFT is a broad ‘umbrella’ term that includes many types of electronic payments such as ACH transfers and wire transfers. EFT is also referred to as an ePayment because the transaction is done completely online.

EFTs are becoming increasingly common in the world of B2B payments as many businesses are shifting away from traditional paper checks towards more efficient and lower cost ePayment methods such as ACH.

The EFT can happen between accounts within one bank, or between accounts across multiple banks.

Other transaction types that are considered EFT include direct deposit, ATMs, virtual cards, eChecks, and personal computer banking.

As traditional paper processes become digitized, computerized systems EFT transactions will continue to grow and evolve. Activities such as utility bill payments have traditionally been ‘paper-intensive’ requiring physical statements, invoices, checks, and receipts. These processes now largely take place over digital networks – this change is shifting the banking world’s paradigm.

What are ACH Transfers & Payments?

ACH payments are increasingly becoming the go-to payment method for domestic money transfers across many sectors.

Also referred to as echecks or electronic checks, ACH is a reliable, efficient, and cost effective way to move funds between accounts without needing a checkbook, envelope, and stamps. A primary differentiation of ACH payments is the batch processing method.

Checks or even wire transfers are generally processed one transaction at a time. The clearinghouse system leveraged by the ACH network processes inter-institution transfers in groups or batches.

ACH transactions are growing in popularity. In the first quarter of 2016, the ACH network processed more than 5 billion transactions. That is largest volume of transactions the network has ever processed in a single quarter – up 6.1% from the first quarter of 2015.

ACH is becoming more common as a payment method for payroll (direct deposit) and for recurring utility payments (auto bill-pay).

B2B payments are also increasingly leveraging the ACH network and these business or accounts payable payments account for a large portion of the overall growth of the network.


Weighing the pros and cons of ACH vs EFT is comparing apples to fruit. Apples are a type of fruit, but not all fruits are apples. ACH is a type of EFT, but not all EFTs are ACH payments.

The key difference between an ACH and EFT is specificity and detail.

Due to the wide range of payment methods considered to be EFTs there are many variables that can influence the cost, risk level, and timeliness of the transaction.

Switching from Paper Checks to Electronic Transfers

One of the best ways to save money every month when you make affiliate or publisher payments is to add electronic payment options to your existing payments done through paper checks. Electronic funds transfers are fast, simple and save you time and money. Learn two reasons why you should add online payment methods today.

Mailing Checks is Slow

One of the biggest downsides to using paper checks to make mass payments is that it is a slow process. You must wait for postal service hours, including accounting for no mail service on holidays.

In addition, it takes time for the envelope to be processed and then transferred to the state and address you put on the envelope.

You can save time by immediately transferring the money through an electronic option, no matter what time of day it is.

Checks Are Harder to Track

Once you make your payment, you will need to follow up with your payee to ensure they received it. You will need to keep track of the check to make sure it arrives on time. Electronic options are easy to track, and you can receive an email confirmation when the payee receives funds.

More EFT Payment Methods

Because EFT is a broad term with no officially sanctioned definition, there are a number of other payment methods that can be considered electronic funds transfers.

While ACH payments and echecks are well universally considered to be EFTs, a number of other electronic payment and transfer methods may also be referred to as part of the EFT family.

A few other electronic payment methods include ACH, wire transfer, PayPal, direct deposit, SEPA payments, local bank transfers, and ewallets.

Источник: https://tipalti.com/eft-vs-ach/

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