EFT vs ACH – The difference between EFT Payments and ACH Transfers


EFT is the acronym for electronic funds transfer, also referred to as an ePayment. EFT is a broad ‘umbrella’ term that includes many types of electronic payments such as ACH transfers and wire transfers. 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. 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 like 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.

ACH Transfers and 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 like 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.