Payment Systems

ACH vs. EFT Payments: A Comprehensive Comparative Guide

Money makes the world go round, but how it moves has evolved. We’ve transitioned from cash and checks to electronic transactions, two of which are ACH and EFT payments.

But what are these, and how do they differ? Let’s dive in!

Understanding the Basics

What are ACH Payments?

Let’s say you have a monthly gym membership.

Instead of writing a check or manually making a payment online every month, you’ve authorized the gym to automatically withdraw the monthly fee from your bank account.

This is done through the ACH network. The gym sends a request to their bank, which then communicates with your bank through the ACH network, and the funds are transferred from your account to the gym’s account.

This is an example of an ACH payment.

ACH or Automated Clearing House payments are a way of transferring funds electronically across a network of banks or other financial institutions.

They’re like digital checks, and are commonly used for direct deposit, bill payments, and business-to-business (B2B) transactions.

What are EFT Payments?

Imagine you’ve just finished a great meal at a restaurant. When it comes time to pay, instead of cash, you pull out your debit card.

You hand it over to the server who swipes it through their card machine.

In a matter of seconds, the funds are transferred electronically from your bank account to the restaurant’s bank account.

This is an example of an EFT payment.

EFT or Electronic Funds Transfer, on the other hand, is a broad term that encompasses various types of electronic payments, including ACH payments.

Thus, EFT, or Electronic Transfers, is a big category that includes many ways to move money electronically. ACH, or Automated Clearing House transfers, are one type of EFT.

So, every ACH transfer is an EFT. Other types of EFTs include online checks, ATM withdrawals, and some card payments at stores.

Understanding ACH and EFT Payments

How ACH Payments Work

ACH payments travel between banks through an automated clearing house.

The payer’s bank sends a batch of payments to the clearing house, which then distributes them to the respective payee’s banks.

This batching process helps to streamline transactions and reduce costs, although it can slow down the overall transaction time.

As, an ACH payment is a way to move money between bank accounts electronically. It works like this:

  • 1. You want to send money to someone or pay a bill.
  • 2. You give the receiving person or company your bank account information.
  • 3. They send a request to their bank to get the money from your account.
  • 4. Their bank talks to your bank using the ACH network.
  • 5. The money moves from your account to their account, usually within a day or two.

ACH payments are simple and safe, and often used for things like direct deposit of paychecks and automatic bill payments.

How EFT Payments Work

EFT payments work by electronically moving money from one account to another.

Depending on the type of EFT (credit card, wire transfer, mobile payment, etc.), the process may involve different networks and technologies.

But the end result is the same: funds are transferred electronically, providing convenience and efficiency.

Here’s how it works in a very simple way:

  • 1. You decide you want to send money to someone else or a company.
  • 2. You provide your bank with the details of the other person’s or company’s bank account.
  • 3. Your bank moves the money electronically to the other account.
  • 4. The money appears in the other account after a short while.

EFT can be used for a lot of different things, like paying bills online, receiving your paycheck directly into your bank account, or using a debit card to buy something at a store.

It’s quick and convenient because you don’t need to use cash or write checks.

Comparing ACH and EFT Payments

When it comes to electronic transactions, EFT and ACH are two popular options. But how do they stack up in terms of cost, speed, security, and transfer limits?

Let’s compare them side by side.

1. Cost

Commonalities – Both EFT and ACH aim to reduce the cost of transactions compared to traditional paper-based methods like checks. By moving money electronically, businesses and individuals can save on processing fees and other related expenses.

Differences – While ACH transactions typically have low or even no fees, other forms of EFT may come with associated costs. For example, credit card transactions usually have a percentage fee charged to the merchant, and wire transfers can incur fees for both the sender and receiver. ACH can be more cost-effective for certain types of transactions, like B2B payments, compared to other EFT options.

2. Speed

Commonalities – Both EFT and ACH payments are generally faster than traditional paper-based methods. By electronically transferring funds, the overall processing time is reduced.

Differences – While ACH payments are faster than paper checks, they are typically slower than some other EFT options. ACH transactions are processed in batches and can take a few days to complete. In contrast, certain EFT types, like wire transfers, can be nearly instantaneous.

3. Security

Commonalities – EFT and ACH transactions both offer a level of security, as they are processed electronically and regulated by financial institutions. This helps to protect consumers and businesses from fraud and other malicious activities.

Differences – Despite both being secure, the level of security can vary between EFT and ACH. ACH transactions are processed through a network of banks, which provides additional layers of protection. Some EFT types, like credit card transactions, may be more vulnerable to fraud due to the widespread acceptance and use of credit cards. It’s essential to monitor accounts regularly and report any suspicious activity.

4. Transfer Limits

Commonalities – Both EFT and ACH transfers may have limits imposed by banks or payment processors. These limits can vary depending on the financial institution and the type of transaction.

Differences – ACH transfer limits are generally higher than certain EFT types, like daily ATM withdrawal limits or point-of-sale transaction limits. This makes ACH more suitable for larger transactions, such as B2B payments or mortgage payments. However, wire transfers, another type of EFT, can accommodate even larger amounts, making them ideal for high-value transactions. It’s important to check with your bank or payment provider for specific transfer limit details.

In conclusion, while EFT and ACH share similarities, they have key differences when it comes to cost, speed, security, and transfer limits.

Understanding these differences can help individuals and businesses make informed decisions about which payment method is best suited for their needs.

Benefits and Drawbacks

Benefits of ACH Payments


ACH transactions can be a cost-effective solution for businesses. They often come with low or even no fees, especially compared to credit card transactions, making them a popular choice for B2B payments.


ACH payments also provide a level of security. Since transactions are processed through a network of banks, they’re regulated and monitored for fraudulent activity.

Drawbacks of ACH Payments

Transaction Time

One downside of ACH payments is the transaction time. Due to the batch processing nature of ACH, transactions can take a few days to complete. This isn’t usually a problem for regular bill payments, but it may not be suitable for immediate transactions.

Risk of Errors

Like any electronic system, there’s a risk of errors with ACH payments. Incorrect banking information can lead to failed transactions. However, with careful data entry and management, this risk can be minimized.

Benefits of EFT Payments


EFT provides a high level of convenience. Whether it’s swiping a card, clicking a button online, or tapping a phone, EFT payments are quick and easy, making them a popular choice for consumers.

Wide Acceptance

EFT payments are widely accepted around the world. From local stores to international websites, you can use EFT almost anywhere, anytime.

Drawbacks of EFT Payments

Security Concerns

While EFT payments do have security measures in place, they’re not immune to fraud. Credit card details can be stolen, and unauthorized transactions can occur. It’s essential to monitor accounts regularly and report any suspicious activity.

Transaction Fees

Depending on the type of EFT, there may be transaction fees. Credit card companies, for example, often charge a percentage of each transaction, which can add up for businesses.

AptPay, a versatile and modern payment platform, simplifies financial transactions by offering support for both EFT and ACH payments. This comprehensive approach provides users with seamless experience, accommodating various types of electronic transactions, from credit card payments to direct deposits and B2B transactions.

By catering to the diverse needs of individuals and businesses, AptPay streamlines the payment process, enabling users to manage their finances with ease and efficiency while enjoying the benefits of both EFT and ACH payment methods.


If you’re interested in exploring the benefits of either EFT or ACH for your financial needs, don’t hesitate to contact AptPay’s sales experts, who are eager to help you find the perfect solution tailored to your requirements.

Frequently Asked Questions (FAQs)

What’s the primary difference between ACH and EFT payments?

ACH is a type of EFT. ACH specifically refers to the transfer of funds between banks through a centralized system, while EFT is a broader term that includes various types of electronic payments.

Do ACH and EFT payments have fees?

ACH payments often come with low or no fees, while fees for EFT payments can vary depending on the type of transaction (credit card, wire transfer, etc.).

How long do ACH and EFT transactions take?

ACH transactions can take a few days due to their batch processing nature. EFT transaction times can vary, with some types like wire transfers being nearly instantaneous.

Can I use ACH or EFT payments for international transactions?

While ACH is typically used for domestic transactions in the U.S., certain types of EFT can be used for international transactions. Generate simple and easy to understand answers.

Is EFT faster than ACH?

In general, some types of EFT transactions can be faster than ACH transactions. ACH payments are processed in batches, which can take a few days to complete. On the other hand, certain EFT types, such as wire transfers, can be nearly instantaneous. However, it’s essential to note that EFT is a broad term that includes various electronic payment methods, and the speed of these methods can vary. ACH itself is a type of EFT.

Is an ACH payment an EFT payment?

Yes, an ACH payment is a type of EFT payment. EFT, or Electronic Funds Transfer, is a broad term that encompasses various types of electronic payment methods, including ACH payments. ACH, or Automated Clearing House, is a specific electronic payment system that facilitates the transfer of funds between banks through a centralized network.

What is ACH called in Canada?

In Canada, the equivalent of the ACH system is called the Electronic Funds Transfer (EFT) system. It is facilitated by Payments Canada and allows for the electronic transfer of funds between banks and other financial institutions within the country. This system enables various types of transactions, such as direct deposits, bill payments, and pre-authorized debits.


  • Shams Syed

    Before becoming CEO at AptPay, Shams led Digital Partnerships in Canada for Mastercard, gaining insights into the entire payment ecosystem, including payment facilitators, aggregators, and the evolving six-party model. His experience extends beyond fintech, as he has collaborated with acquirers, direct merchants, consultants, and loyalty programs, allowing him to approach the financial ecosystem with a holistic perspective and develop solutions that address the needs of all stakeholders.