When processing payments online, many business owners ask "is EFT and ACH the same?" This confusion costs time and money. Let's clarify the differences with real-world examples.
Key Differences Between EFT and ACH
How ACH payments work for recurring billing
Sarah runs a SaaS company with 2,000 monthly subscribers. She initially used credit card payments but faced 15% churn from expired cards. After switching to ACH debits through Stripe, her retention improved by 22% (PYMNTS 2023 report).
- Sign up for an ACH processor like Stripe or PayPal
- Collect customer bank details via secure form
- Set up recurring payment schedules
Recommended: Stripe ACH guide with sample API code
When to use EFT for instant transfers
Mike's e-commerce store lost $8,000 last quarter from fraudulent checks. His bank recommended EFT wire transfers for wholesale orders over $1,000. The Federal Reserve reports EFTs have 0.03% fraud rates vs 1.2% for checks (2024).
- Enable EFT in your merchant account settings
- Add "Wire Transfer" checkout option
- Verify incoming payments with your bank
Processing times: ACH vs EFT comparison
Restaurant owner Lisa nearly missed payroll when an ACH batch took 3 days during holidays. Now she uses EFT for time-sensitive payments. NACHA data shows 98% of ACH credits settle next-day, while EFTs complete in hours.
Optimization Tips
1. Use ACH for recurring bills under $5,000
2. Reserve EFT for urgent/large transactions
3. Always verify bank details first
4. Monitor NACHA rule changes quarterly
FAQ
Q: Can I reverse an EFT like ACH?
A: No - EFTs are irreversible once sent. Always double-check details.
Q: Which has lower fees?
A: ACH averages $0.25-$1.50 vs EFT's $15-$30 (2024 bank surveys)
Summary
Now you know EFT and ACH aren't the same - each serves distinct payment needs. Choose wisely based on your transaction types.
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