ACH vs Electronic Funds Transfer Payments: What’s the difference?

There are several EFT payment types that we’ll discuss in this post. Examples of federal government entities using ACH payments as a type of electronic funds transfer (EFT) include the U.S. Department of the Treasury and the Social Security Administration (SSA). The U.S. Treasury issues stimulus payments and IRS refunds of tax payments as ACH payments.

Phone Payments

The Electronic Fund Transfer Act also provides bookkeeping and payroll services ways to rectify any errors and limits consumer liability in the event of a lost or stolen card. Digital payment is the way of today, and tomorrow, and that means any business, large or small, needs to take advantage of electronic transactions. This concept is applicable to every digital transaction out there, and for merchants, businesses, and consumers it’s important to know how electronic money transfers work. Some electronic funds transfers are sent and received on the same day (e.g., wire transfers). Credit card payments provide consumers with the convenience of deferred payment and the ability to earn rewards such as cash back or travel points.

Debit and credit card transactions

• There are several EFT payment types that we’ll discuss in this post.
• This guide will teach you how to design an effective checkout process for cross-border payments, with a specialized focus on the trending emerging markets.
• Here are just some common EFT payments you might use for your business.
• The EFTA is a federal law that protects individuals who make EFT payments.
• Book a demo today to see what running your business is like with Bench.
• Whether through direct deposits, ACH, wire transfers, or eChecks, EFT brings security, convenience, and cost savings to businesses of all sizes.

Examples of peer-to-peer payment systems include PayPal, Venmo, Zelle, Apple Cash, and eWallet apps where both parties (the payer and payee receiver) have accounts. EFT refers to electronic funds transfer electronic funds transfer and this is a digital transaction where funds are deducted from one account and sent to another account. EFT payments can be used in many situations, like paying suppliers, billing customers, and direct deposit payroll.

• At Stax, not only do we provide the tools you’ll need, but we’re also committed to providing useful information to help you stay informed.
• When it comes to transferring funds, there are many options available, each with its pros and cons.
• With the growing preference for digital payments, adopting EFT ensures businesses can meet modern customer expectations, reduce operational costs, and secure their financial processes.
• Other transaction types that are considered EFT include direct deposit, ATMs, virtual cards, e-Checks (used globally), peer-to-peer payments, and personal computer banking.
• With several established federal laws, such as the Electronic Fund Transfer Act (EFTA) of 1978, there’s significant protection for consumers using electronic transfer methods.

EFTs explained: A guide to EFT payments and how they work

• These services will help you manage transactions, monitor for fraudulent activity, and keep the process running smoothly.
• Another popular payment method that started as a way of transferring funds between bank accounts on the consumer side is peer-to-peer (P2P) payments.
• Larger banks can often process ACH payments faster than smaller banks.
• Contactless payments are another form of EFT that involve Near-Field Communication (NFC).
• A veteran of the payments industry and former employee at one of the largest payments companies, Michael, along with his brother Stephen, has led Swipesum since its inception in 2016.
• There are others too, like Debit Card Transactions, Electronic Benefits Transfer (EBT), and Online Bill Pay, which allow you to send funds digitally to businesses or individuals.

Essentially, EFT payments come in several flavors, each tailored to suit a variety of financial needs and scenarios. EFT payments can revolutionize the way you do business, making transactions quicker, safer, and more convenient. It’s no wonder why more and more businesses are jumping on the EFT bandwagon. In addition to being convenient, EFT payments are also secure.

• Personnel interaction is needed for these tasks, which means less gets done or additional employees are necessary.
• During the point-of-sale phase of a transaction, a credit card or debit card is the most commonly used form of payment worldwide, replacing cash.
• Electronic Funds Transfers are the bedrock of modern financial transactions.
• As businesses increase their usage of EFT, paper checks become obsolete due to expense, slower expedition, and overall effort.
• From paying bills online to direct deposit of employee salaries, EFT can be seen in various forms.
• EFTs are becoming increasingly common in B2B payments as many businesses shift from traditional paper checks towards more efficient and lower-cost ePayment methods such as ACH.

This payment method is convenient and continues to be a growing trend, especially among younger demographics. EFT payments are transactions between the sender and receiver that transfer funds electronically from the sender’s bank account to the receiver’s. This can include peer-to-peer normal balance payments, and business-to-business (B2B) or business-to-customer (B2C) transactions.

Popular EFT payments providers:

With so many uses, EFT payments are essential to how money moves through the economy and your life. EFT technology enables companies to reach the entire population from anywhere in the world. The same ease and cost-effective nature exists with international payments, and businesses rely on this convenience. Indeed, EFT is a window into worldwide business, giving the same opportunities to small tech start-ups as large corporations.