Electronic Funds Transfer (EFT)
An umbrella term for any movement of money between bank accounts done electronically, including ACH, wire transfers, and direct debits.
Definition
Electronic funds transfer, or EFT, is the umbrella term for moving money between bank accounts electronically rather than with paper checks or cash. It covers ACH transfers, wire transfers, direct debits, and even debit card transactions and ATM withdrawals. When a client says they will "pay by EFT," they almost always mean a bank transfer, most commonly ACH in the US.
Because EFT is a category rather than a specific method, the details depend on which rail is used. An ACH transfer is cheap and takes a day or two; a wire is same-day but costs $15 to $50; a direct debit is something you pull on a schedule. In Canada, "EFT" specifically refers to the national bank transfer system, which is worth knowing if you invoice Canadian clients.
Why It Matters
Knowing the EFT landscape lets you steer clients toward the payment rail that fits the situation. For a routine $8,000 invoice, ACH saves you hundreds versus a card payment. For a time-critical closing payment, a wire gets funds to you the same day. Listing specific options on your invoice, rather than just "bank transfer," removes friction and back-and-forth.
EFT payments also leave a clean electronic trail, which simplifies reconciliation and disputes compared to checks. No more "the check is in the mail": the payment either shows in the system or it does not, and you can follow up with confidence.
Examples
- 1
An invoice footer lists EFT options: ACH (free, 1-2 days) or wire ($25 fee, same day), letting the client choose speed versus cost.
- 2
A Canadian client pays a US contractor's $6,000 invoice by EFT, and the contractor confirms receipt the next business day rather than waiting a week for a mailed check.
- 3
A landlord-facing bookkeeping firm replaces 40 monthly check payments with EFT collections, cutting deposit trips and reconciliation time to nearly zero.
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