EFT vs ACH – The Difference Between These Two Payment Methods
In the United States, EFT refers to electronic funds transfer. This is a generic term used for any kind of fund transfer from one party to another electronically through an intermediary. For example, EFT can refer to a payment made via a debit card or a credit card under this category.
On the other hand, ACH stands for Automated Clearing House. ACH is a network structure controlled by the National Automated Clearing House Association (NACHA) through which financial data can be transferred from one source to another electronically. Now, what’s the difference between EFT and ACH? Should you use EFT or ACH for your business?
It all depends on what payment processing service provider you go with. Some companies don’t offer both EFT and ACH, but they may support one or the other (or neither).
What is an EFT?
An EFT refers to any kind of electronic funds transfer including credit card payments, debit card payments and prepaid cards under this category.
What is ACH?
ACH, as mentioned before, stands for Automated Clearing House. It’s a network structure controlled by the National Automated Clearing House Association (NACHA) through which financial data can be transferred from one source to another electronically. You can use ACH for your business if you want to make recurring payments, make direct deposits and make withdrawals.
What’s the difference between EFT and ACH?
ACH is faster than EFT in many ways because it takes only 1-2 days to complete a transaction when using ACH. On the other hand, credit card transactions (EFT) take much longer because they take several days to complete. You can use ACH for your business if you want to make recurring payments, make direct deposits and make withdrawals (EFT can do these things too).
What is the difference between EFT and ACH payment methods?
ACH only deals with electronic transactions while EFT deals with both electronic and paper transactions. If you want to use paperless transactions in your business, you should go with ACH. On the other hand, if you have a mixed preference between electronic and paper transactions, EFT is your pick.
What payment methods are similar to ACH?
Although they’re not exactly the same as ACH, here are some payment processing methods similar to ACH: credit card payments, debit card transactions, PayPal and other eWallets.
What payment methods are similar to EFT?
Although they’re not exactly the same as EFT, here are some other payment processing methods including electronic checks, direct deposit and wire transfers. Here’s a useful guide if you’re looking for payment processing methods.
*Please Note: This article was created to provide information on EFT vs ACH and it’s not a comprehensive guide to the two types of transactions. To get more information on how credit card transactions (EFT) and electronic funds transfers (ACH) work, you should contact a payment processor like Host Merchant Services.