Although ACH and EFT are both examples of electronic funds transfer, they serve two very different purposes. With that in mind, it’s important to understand when one may be better suited for a particular business case than the other. Below is a list of differences between ACH and EFT:

  1. ACH payments can occur only on business days, while EFT transactions can take place 24 hours a day, seven days a week.
  2. ACH payments are limited to no more than two attempts per payment, while EFT allows for unlimited attempts on failed transactions.
  3. Expedited ACH takes one or two business days to complete the transaction, while EFT transactions are generally processed the same day.
  4. ACH is not intended for high-dollar payments since ACH processing fees can be expensive, while EFT has no fee limitations and is often offered at low cost to businesses.
  5. An ACH transaction must originate from a bank account, while EFT can originate from a credit card, debit card or checking/savings account.
  6. ACH transactions occur on the bank’s schedule and do not offer any flexibility; EFT is more flexible since it allows for last minute updates to transaction data by the originator of the payment transaction.
  7. ACH transactions require more identity verification than EFT, which makes it more difficult to set up new payment accounts.
  8. ACH is used for recurring payments, while EFT is often used for one-time transactions since they are easier and less expensive to process.
  9. Both ACH and EFT require authorization by the account holder, but funds for an ACH transaction must be pre-cleared before initiating the payment, while EFT provides real-time access to the transferred funds.
  10. ACH payments can take up to four business days – and sometimes longer – to process and settle, whereas EFT transactions are often completed in one business day or less.
  11. ACH payments cannot be stopped or recalled once submitted, while EFT payment transactions can be stopped for up to 30 days if the need arises.
  12. Both ACH and EFT have zero liability protection when authorized by the account holder, but errors in processing are not always covered under this protection .
  13. ACH is used for business-to-consumer (B2C) payments, while EFT is typically used for business-to-business (B2B) transactions.
  14. By law, ACH transaction data must be destroyed after two years, while with EFT data can be stored indefinitely .
  15. ACH is regulated by the Federal Reserve, while EFT transactions are overseen by The Electronic Funds Transfer Association (EFTA).
  16. During an ACH transaction both parties retain their original account numbers in order to facilitate additional transfers in the future, while with EFT the amount and destination of each payment is specified when initiating the transaction.
  17. The ACH network can process payments to international bank accounts, whereas EFT is not allowed for cross-border transactions.
  18. ACH payments are governed by the Electronic Fund Transfer Act, while EFT transactions are covered under the Uniform Commercial Code .
  19. When accepting payments with ACH, businesses should review their merchant agreements with their bank to ensure compliance with the rules and regulations surrounding ACH transactions.