Difference Between ACH and EFT (With Table)

ACH and EFT are two variants of online payment systems. And, ACH falls under the category of EFT, with the other related payment systems. As we know, online payment systems have taken a great pace in recent years and hence both ACH and EFT have been used widely. The online transaction has become daily or monthly trouble for many people to pay their dues. There are both pros and cons of the online method of transacting money. The major benefit mm of online transactions is that it saves a lot of time and energy for the person, who is involved in the transaction process as he/she do not require to go to the bank on every possible transaction. And on the other hand, the major drawback of online transactions is that sometimes there can be some sort of technological issues, and one more common drawback is the security assessments.

ACH vs EFT

The main difference between ACH and EFT is that ACH is an online payment system that comes under the types of EFT, and on the other hand, EFT is the sole payment method that includes various types of electronic payment systems. Also, one more major difference is their abbreviations of the terms ACH and EFT. The abbreviation of ACH is commonly termed as Automated Clearing House and on the other hand, the abbreviation of EFT is commonly termed as Electronic Funds Transfer.

The ACH refers to the online payment network, that allows the operator and receiver to get connected via the automatic payment processes. It generally, enables the users to use with both credit transfers as well as with direct debit transfers. The abbreviation ACH refers to the terms Automated Clearing House. Also, ACH falls under the category of payment methods of EFT with the various online payment systems.

On the other hand, EFT refers to the computer-based transaction system that allows a particular bank to get connected to the other bank, and also it allows to connect various banks at the same time for transactions. It does not involve the employees of the bank, for the transaction process. There are various types of EFT, and the ACH method is one of them. The abbreviation of EFT refers to the terms Electronic Funds Transfer. Also, the cost of EFT is comparatively more than ACH.

Comparison Table Between ACH and EFT

Parameters of Comparison ACHEFT
Definition The transaction that is generated automatically between the operator and receiver is known as ACH.The online computer-based payment method, that allows easy transaction of money between two parties without involving the bank staff is known as EFT.
Abbreviation ACH is the abbreviation of the terms Automated Clearing House.EFT is the abbreviation of the terms Electronic Funds Transfer.
Involvement of the Respective Bank/Bank StaffACH method does involve the bank staff for the transaction process. EFT method does not involve the bank staff for the transaction process.
TypesACH method only involves two types of transactions and they are direct deposit and direct payment. EFT method involves various types of transactions and they are NEFT, IMPS, RIGS, UPI Money Transfer, ATM Transaction, etc.
Expense ACH transactions are comparatively expensive than EFT transactions. 8 transactions are inexpensive than the ACH.
SpeedThe EFT ACH method is slower in the process of transacting money.The other EFT transaction processes are comparatively faster than the ACH method.
Security The ACH payment method has comparatively stronger security guidance than the other payment methods of EFT.Other related EFT methods have weeker security guidance than the method of ACH.
Verification The ACH method involves a lot of verification processes before the transaction. The EFT methods such as Credit Card, Debit Card, etc involve less verification and therefore it can be misused easily.
TimeACH takes time to process the transaction. EFT is an instant method of transaction and therefore it only takes a few minutes or so.

What is ACH?

ACH is one of the leading online payment systems that are widely popular in the United Nations. ACH system automatically transfers the money from one bank account to the other, and people find it very convenient to use, as it is easy and time-saving. It depends upon person to person whether they want to use the ACH Credit or ACH Debit, according to their requirements. The ACH Credit is widely used to pay monthly salaries to the employees and on the other hand, the ACH Debit is widely used to pay the monthly bills of some specific dues or so.

ACH generally represents the abbreviation of the terms Automated Clearing House. The ACH payment system is under the systems of EFT processes. Also, the ACH method only involves two types of transactions and they are direct deposit and direct payment, and is generated according to the operator and receiver. The ACH method also involves the bank staff in the transaction process. It specifically includes the bank staff because of its security or in other words the allowance system by the operator when he/she requires verification before the transaction. And hence, the ACH payment method has comparatively stronger security guidance than the other payment methods of EFT.

The ACH method charges some amount of money as its transactions charge and it is comparatively high in terms of charge than the other EFT transactions. Also, the ACH system takes time to process the transaction. It depends upon the operator who initiates the transaction. And, it also involves a lot of verification and therefore it is safe and secure to use the ACH payment method.

What is EFT?

EFT is an abbreviation and it refers to the terms Electonic Funds Transfer. There are several types of transaction methods or processes under the system of EFT. And those systems include processes such as NEFT, IMPS, RIGS, UPI Money Transfer, ATM Transaction, Debit cards, Credit cards, etc. It is also a computer-based payment method, that allows easy transaction of money between two parties without involving the bank staff. EFT does not involve bank staff for any kind of guidance and verification as it sends OTP or other related verification queries to the registered mobile number itself.

The EFT transactions are inexpensive as they do not or rarely charge any money, which is very low and affordable. For example, Credit cards, debit cards charge some minimal amount of money for their services or initially fr the usage of the card. Also, even though EFT processes are widely used or mostly used by the general people of the society but they can be termed as least secured, and therefore the security level is very low. Anyone can randomly use other EFT processes as it concludes poor verification possibilities.

The Debit card and Credit card can be easily missed by the other person, also the UPI transaction processes can be misused if the owner is not aware of the technical terms and assessments. And therefore, EFT methods have weeker security guidance. Only the ACH process under the EFT has a lot of verifications that can be least misused. Also, one common benefit of EFT processes is that their transaction processes are comparatively faster while transacting.

Main Differences Between ACH and EFT

  1. The transaction that is generated automatically between the operator and receiver is known as ACH. On the other hand, the online computer-based payment method, that allows easy transaction of money between two parties without involving the bank staff is known as EFT.
  2. ACH is the abbreviation of the terms Automated Clearing House. On the other hand, EFT is the abbreviation of the terms Electronic Funds Transfer.
  3. ACH method does involve the bank staff for the transaction process. On the other hand, the EFT method does not involve the bank staff in the transaction process.
  4. ACH method only involves two types of transactions and they are direct deposit and direct payment. On the other hand, the EFT method involves various types of transactions and they are NEFT, IMPS, RIGS, UPI Money Transfer, ATM Transaction, etc.
  5. ACH transactions are comparatively expensive than EFT transactions. On the other hand, EFT transactions are inexpensive than ACH.
  6. The EFT ACH method is slower in the process of transacting money. On the other hand, the other EFT transaction processes are comparatively faster than the ACH method.
  7. The ACH payment method has comparatively stronger security guidance than the other payment methods of EFT. On the other hand, other related EFT methods have weeker security guidance than the method of ACH.
  8. The ACH method involves a lot of verification processes before the transaction. On the other hand, the EFT methods such as Credit Card, Debit Card, etc involve less verification and therefore it can be misused easily.
  9. ACH takes time to process the transaction. On the other hand, EFT is an instant method of transaction and therefore it only takes a few minutes or so.

Conclusion

From the above instances, we can conclude that ACH and EFT are the two types of transacting methods that are widely used, where ACH is one of the variants of EFT processes and on the other, EFT is the sole payment process where it has various types of transaction processes under it. Online transaction processes have been growing at a great pace among people and many depend upon these systems for transactions as it makes things easier. Both, ACH and EFT have many differences that make them distinctly different from each other. Also, the ACH methods involve the bank staff for the transaction and whereas EFT does not involve any of the bank staff. People can use any of these processes according to their convenience.

References

  1. https://search.proquest.com/openview/56d363e7d98a5f51145c99fb013e9dce/1?pq-origsite=gscholar&cbl=27768
  2. https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/usflr13&section=26
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