EFT and ACH payment methods are fluctuating in popularity amid the coronavirus pandemic. But what are these methods and how do they differ?
While both methods can help small businesses handle their various daily, monthly, and yearly transactions, they are not identical.
EFT: Electronic Funds Transfer
The difference between EFT and ACH is a bit confusing because all ACH payments are EFTs, but not all EFTs are ACH payments. EFT (electronic funds transfer) is an umbrella term that includes ACH payments, wire transfers, ATMs, virtual cards, and personal computer banking.
There is no defined standard for what all falls under the EFT umbrella, but the generally accepted standard is that any type of transaction or payment that is made electronically is considered an EFT.
ACH: Automated Clearing House Payments
ACH is shorthand for Automated Clearing House. It is one of the most popular EFT methods in the world, and these types of transactions are becoming more and more popular.
Have you set up an auto-pay system for your car payment or mortgage? That is ACH at work. Do you send or receive paychecks through direct deposit? Also ACH.
There were 6.6 billion payments made on the ACH Network during 2020’s second quarter. That’s a 7.9% increase when compared to the same period in 2019, according to Nacha. This is especially important to note right now, as there are very few arenas experiencing significant growth in these unprecedented times.
The ACH payment network is gaining popularity for many reasons, including its safety and security measures and the ability to “reliably handle massive transaction volumes”.
The clearinghouse system that ACH is leveraged by has a major advantage over other EFTs: transfers from one institution or business to another can be done in large batches, with each transaction able to move up to $100,000 at a time.
ReliaFund is Your One-Stop-Shop for ACH and other EFT Solutions
You shouldn’t have to worry about integrating payments across online and mobile platforms.
ReliaFund has complete payment processing software you can rely on with confidence. The ReliaFund Electronic Payment Services can help you streamline your payment processes and send and receive ACH payments using less time and money, all while retaining the highest levels of security and PCI compliance.
We can also help you:
- Process sales, credit authorizations, credit returns, and voids
- Set up automated billing and payments
- Integrate with any application, including the cloud