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Guilherme Mazui

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What is the Difference Between ACH and EFT?

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The main difference between ACH and EFT lies in their scope. ACH (Automated Clearing House) is a specific type of digital payment, while EFT (Electronic Funds Transfer) is an umbrella term for all digital payments, including ACH transfers, wire transfers, and other online electronic payment methods.

Here are the key differences between ACH and EFT:

  • Definition: ACH transfers involve the electronic movement of money between banks or accounts, while EFT is a broader term that includes various types of electronic payments.
  • Types of Transactions: EFT covers a wide range of transactions, such as ATM transactions, debit card transactions, peer-to-peer payments, wire transfers, and ACH transfers. ACH transfers, on the other hand, specifically refer to payments sent via the Automated Clearing House.
  • Timing and Cost: ACH payments are sent in batches, which can sometimes result in slower processing times compared to other EFT transactions, such as wire transfers. ACH transfers may be free or cost a few dollars, depending on the transaction. EFT costs and fees vary considerably depending on the type of EFT, the origin and destination of the transfer, and the amount of money involved.

In summary, EFT is a broader term that encompasses all digital payments, while ACH is a specific type of EFT that involves the electronic movement of money between banks or accounts. Not all EFT transfers use the ACH system, and the differences between ACH and EFT payments can be seen in their definition, types of transactions, timing, and cost.

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  • What is the Difference Between ACH and EFT?
  • Comparative Table: ACH vs EFT

    • Comparative Table: ACH vs EFT

    The main difference between Electronic Funds Transfer (EFT) and Automated Clearing House (ACH) payments is that EFT is an umbrella term for all digital payments, whereas ACH is a specific type of digital payment. Here is a comparison table of the two:

    Feature EFT ACH
    Definition EFT is a broad term for a payer sending money and a payee receiving it through digital means. ACH is a specific type of digital payment that involves moving money from one bank to another.
    Scope EFT encompasses various electronic payment methods, including ACH, Electronic Federal Tax Payment System (EFTPS), Electronic Funds Withdrawal (during e-filing), same-day wire, check, and money order. ACH is a specific electronic payment method governed by the ACH Rules and formatted according to the ACH format.
    Electronic Federal Tax Payment System (EFTPS) EFTPS is primarily an ACH payment method, although it rarely allows same-day wire transfers for payment. EFTPS is an ACH payment method.

    Both EFT and ACH are digital payment methods, but EFT is a broader term that includes various types of electronic payments, whereas ACH is a specific electronic payment method governed by the ACH Rules.

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    Guilherme Mazui

    Guilherme Mazui is graduated in journalism from the Federal University of Minas Gerais (UFMG) and a master's degree in Communication from the University of São Paulo (USP). In addition, he has experience in advertising writing and has worked as a content editor in several companies.