EFT vs ACH: What’s the Difference?

Payment Processing
If you’ve made an online purchase recently or, essentially, bought anything with a credit card, then you’ve become part of the burgeoning electronic payment industry. Globally, customers have contributed to over $4.1 trillion worth of transactions with digital payments in 2019, and this amount is expected to grow. By 2023, it’s predicted that mobile point-of-sale payments may account for more than 30% of global transactions. As consumers increasingly choose electronic payments over writing checks or the cash in their wallets, it’s important to understand different electronic fund payment types and how your business can benefit by selecting the right payment method for your business.

EFT vs ACH: What’s the Difference?

To understand electronic payments, it’s key to understand two popular forms of digital payments, Automated Clearing House (ACH) and Electronic Funds Transfers (EFT).

ACH Payments

ACH payments, also known as direct payments, transfer money from one bank account to another bank account, electronically, through the financial network known as the Automated Clearing House (ACH). Since the Automated Clearing House connects banks across the United States to one another, ACH payments can transfer funds without having to utilize intermediary mechanisms like paper checks, credit cards, or wire transfers. A mainstay of the modern business world, there were nearly 25 billion ACH payments for a total value of $55.8 trillion in 2019 alone – and this number is expected to grow. ACH payments are monitored by the National Automated Clearing House Association, or Nacha (previously known as NACHA), a 501(c)(6) not-for-profit association that essentially regulates the backbone of any electric movement of money in the U.S.

EFT Payments

Electronic Funds Transfer payments, commonly referred to as an EFT, is a form of electric payment. In fact, EFT payments are an umbrella term to cover general electronic payments as a whole, including ACH payments. While ACH and EFT payments are not entirely synonymous, an ACH payment transfer is a type of EFT payment, just like wire transfers and virtual wallets. Essentially, EFT payments are any type of digital money exchange that exempts the need for physical cash or paper checks. They are becoming increasingly widespread as businesses move away from traditional payment methods to more accessible alternatives, such as direct deposits, eChecks, and virtual credit cards, to name a few.

Understanding Different Electronic Fund Transfer Types

As many businesses move away from physical currency and checks and towards various electronic payment methods, it’s important to be aware of the different types of electronic fund transfers out there. credit-and-debit-cards-are-a-type-of-EFT-payment.

Credit or Debit Cards

Carried by over 70% of Americans, credit and debit cards are a popular choice for both consumers and businesses. Transactions with any card are considered an EFT payment since the card reader initiates an electronic transfer of funds between a consumer’s bank or credit card company and a vendor’s bank account. While debit cards take funds directly from a bank account, consumers paying with credit cards make the purchase and then later repay the credit card company for the amount. Payments made between the consumer’s bank account and the credit card company are commonly made with an ACH payment transfer.


An eCheck, or an electronic check, is a form of electronic payment that transfers funds directly from a checking account. Unlike a debit card, which works through a credit card issuer, eChecks use the checking account number and the bank’s routing number to send payments through the ACH network to approve the transaction. Simply put, an eCheck is a digital representation of traditional paper checks. By bypassing all the manual process involved with paper checks, such as filling out the appropriate boxes and physically mailing it, eChecks allow you to provide all the necessary payment information in electronic format and deliver it to the recipient instantly.

Virtual Wallets

Also known as e-wallets, digital or virtual wallets are a software-based service that securely stores a shopper’s payment information, including various payment method passwords for websites, shipping addresses, credit or debit card numbers, and other sensitive information, in a single place to use to complete transactions. To make payments, virtual wallets centrally connect bank and credit card accounts and encrypt sensitive payment data. Not only is this an easy way to prevent physical wallets from being stolen or lost, but virtual wallets are also a safer method to keep important data from potential hackers.

Wire Transfers

When you need to send or receive money immediately, wire transfers are a reliable, secure, and instant electronic transaction to ensure funds will be available to the recipient instantly. Wire transfers are essentially a direct electronic transfer of money between banks or credit unions. Also known as a bank transfer, wire transfers are one of the safest electronic fund transfer types since both bank accounts need to be verified before making a transaction.

Choosing the Right Payment Method For Your Business

With so many EFT payment options, it can be overwhelming to choose the right payment method for your business. Adding to the challenge is the growing demands of modern consumers. As more businesses become flexible with payment options, consumers are increasingly preferring to choose vendors that can accept numerous forms of payment types. Additionally, electronic payments have been rapidly expanding as the eCommerce industry explodes following the COVID-19 pandemic and the resulting rapid shift in demand for online shopping. Although electronic fund transfers continue to be an emerging technology, it is one that is here to stay and will continue to evolve to provide more secure and convenient payment options for both consumers and vendors alike. Instead of focusing on one or two payment methods to accept and limit your business’s revenue potential, a merchant payment gateway can provide your business with the ability to unlock a new world of payment processing options. The right merchant payment gateway can allow your business to accept and deliver multiple forms of payment so you can stay ahead of the curve and provide customers with the most convenient payment options.

Unlock Your Payment Flexibility with a Transcend Pay Merchant Gateway

With a flexible merchant gateway, your business can accept multiple forms of payments – including online transactions –  to stay competitive. Whether it’s credit cards, eChecks, ACH transfers, debit cards, or instant fund transfers, a merchant payment gateway can unlock the possibilities of multiple payment options for consumers. With Transcend Pay’s revolutionary merchant payment gateway, your business is equipped with an omnichannel solution to connect your merchant account to a broad range of banks, processors, and financial products to help you complete transactions quickly and easily. Besides accepting multiple forms of payment, the Transcend Pay merchant gateway is also capable of delivering a variety of payments, including ACH transfers and eChecks so your business is capable of handling a wide variety of EFT payment types. Both high-risk and low-risk merchant accounts can take advantage of our merchant gateway without excessive fees! With Transcend’s merchant payment gateway processing, you receive:
  • No reserve requirements.
  • No hidden processing fees.
  • Minimize risk with our extensive banking network.
  • Quick and easy payment delivery and acceptance.
  • Same-day pre-approvals.
We approve 99% of high-risk merchant accounts, so all merchants can access our payment gateway solutions to make your business accessible to as many consumers as possible. Ready to experience the difference of with Transcend Pay? Feel free to contact us with any questions you may have! request-a-quote-transcend-pay