Ach vs. Eft Payments: Key Differences & Benefits Explained

ACH (Automated Clearing House) and EFT (Electronic Funds Transfer) payments are both widely used methods for transferring funds electronically, but they have key differences that make them suitable for different purposes. ACH payments are a subset of EFT, typically used for large-scale transactions such as payroll deposits, bill payments, or direct debits, and they operate in batch processing, which means transactions are cleared at scheduled intervals, usually taking 1-3 business days. This makes ACH ideal for recurring or pre-scheduled payments, offering lower fees and high security, but with slower processing times. In contrast, EFT encompasses a broader range of electronic payments, including wire transfers, card payments, and online banking transfers, which are usually processed in real-time or within the same day, making them faster but often more expensive due to processing fees. Both ACH and EFT payments are secure and regulated by financial authorities, but ACH is generally preferred for cost-efficiency and recurring transactions, while EFT is favored for quick, one-time transfers that need to be completed immediately. Understanding the differences between these methods helps businesses and individuals choose the best option based on speed, cost, and transaction volume.