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The Difference Between EFT and ACH

One of the most common sources of confusion when it comes to external transfers is the difference between EFT and ACH. ACH stands for automated clearing house, which is becoming a very popular way to make external transfers.

The ACH network essentially acts as a financial hub and helps people and organizations move money from one bank account to another. ACH transactions consist of direct deposits and direct payments, including business-to-business (B2B) transactions, government transactions, and consumer transactions.

The modern ACH Network experienced significant growth in 2021, with 29.1 billion payments valued at $72.6 trillion, and Same Day ACH payment volume grew nearly 74%.

ACH transfers are a little different from standard EFT transfers. When you use your debit or credit card, for example, you are setting up an EFT transaction that happens in real time. ACH payments, by contrast, are processed in batches each day.

This means that funds sent via ACH can take from one to four days to move from one account to another, depending on the two financial institutions involved in the transaction. Larger banks can often process ACH payments faster than smaller banks.

Funds sent via ACH can take up to four days to arrive in your recipient’s bank account because these transfers are processed in batches rather than in real time.