Difference Between EFT and ECS

The country currently accepts two types of payments electronically. One is EFT(Electronic Fund Transfer) and the other one is ECS(Electronic Clearing Service).


The main difference between EFT and ECS is that EFT is used to transfer remunerations which may or may not be regular, from one branch to another while ECS is a credit clearing system that is used to transfer a bulk amount regularly.

EFT vs ECS 1

EFT is used to transfer the funds from one bank branch to another. Outstation cheques, bills, and other money transfer operations that occur distantly uses this mechanism. EFT is present in all the four metropolitan cities and is extending to more cities. An office automation package is done to extend this feature.

ECS is used for the payments which are done on a fixed basis in an institution. This scheme works for the payments like fee transfer, salary transfer.


Comparison Table Between EFT and ECS (in Tabular Form)

Parameter of ComparisonEFTECS
Transaction detailsEFT is used to transfer huge amounts and the transaction is secure.ECS can transfer debit and credit operations which may or may not be a huge sum.
FrequencySince EFT transactions occur for larger amounts, the frequency of transactions is minimum.ECS transactions are generally frequent. They may happen regularly.
RemotenessEFT is used for distant transactions which may be inter-state and inter-district.ECS occur for nearby transactions.
Transaction delayThe transaction occurs in batches.The transaction takes a few days to get completed.
Transaction ChargesEFT charges can differ from the amount that is being transacted. The charges vary accordingly.There is no transaction charge associated with ECS and customers can avail this feature free of cost.


What is EFT?

Electronic Fund Transfer(EFT) is a banking scheme through which distant transactions occur. This scheme has reduced paper usage and the time delay to transact huge remunerations from one place to another.

Automated Clearing House(ACH) network is the batch processing system that operates here. The institutions which use EFT generate all transactions to ACH and then the ACH handles them using branches.

There is some information that is required from the receiver to accomplish an EFT transfer. The most important one is the bank that is receiving the funds on his/her behalf.

The Electronic Funds Transfer Act is passed by the U.S Government to protect the customers using EFT. Consumers can report the court if any of their rights are denied while using any form of EFTs.

electronic fund transfer

What is ECS?

The Electronic Clearance Service(ECS) provides a banking scheme where customers can transfer cash periodically. ECS clears the usage of paper transactions that occur regularly and also reduces the time between transactions.

ECS Credit is operational in a situation where an institution is required to pay multiple users. For example if your salary is to be credited, your company’s bank account has to be debited.

ECS debit is also a similar process but the difference is that when you are the person who needs to credit many more similar accounts. You may have to transfer cash for many reasons such as EMI, Gold loan, and many more similar stuff.

People who earn and have fixed incomes can apply for ECS by providing a mandate which contains your bank details. After this, the bank can authorize the institutions which can credit and debit your bank account.

electronic clearance service

Main Differences Between EFT and ECS

  1. EFT mechanism is functional when transactions occur once in a while and need not be repeated often. Paying an entrance exam fee is an example of EFT.
  2. EFTs are used for transfers where both of them are far apart and may not have any communication whereas ECS generally occurs for the transfers that have the sender and receiver nearby.
  3. EFTs charge a certain amount from the sender to ensure the security of the transaction. This charge varies according to the money transacted while ECS does not claim any transaction charges to complete the process.
  4. To enable EFTs for a particular bank, the infrastructure they have and the facilities to implement this system are to be verified. ECS has quick transfers from one bank to another.
  5. EFTs are operational for high-value transactions while ECS is operational for low-value transactions.



Both EFT and ECS are banking schemes that are used to transfer cash from one bank to another. They can be used in credit and debit mode.

Only EFT and ECS approved banks can offer this scheme to their customers. Both of them have made transactions simple and effective.


  1. http://www.ijrbs.com/wp-content/uploads/2019/06/Ms.%20Neetu%20Khandelwal.pdf
  2. http://www.indianjournals.com/ijor.aspx?target=ijor:ajmr&volume=4&issue=3&article=021
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