Unleashed Power Of Ach & Eft: An Overview
WHAT IS THE DIFFERENCE BETWEEN ACH AND EFT
As technology continues to mandate the change in consumer behavior, organizations across industries are leveraging emerging solutions to handle the demands of faster, safer, and scalable payments. Finance executives seeking payment software solution must consider the differences between Automated Clearing House (ACH) and Electronic Funds Transfer (EFT). With deep understanding of both methods, executives are empowered to select the most suitable payment alternative for their needs.
ACH and EFT are methods used to purchase goods and services from vendors. These transfers are electronic money transfers from one account to another. Each with its own specifications, they differ in terms of costs and processing times. The function of both processes is also different and executives must evaluate their unique requirements to decide which system best suits the organization.
Funds transmitted by ACH network require an originator that initiates the transfer. This can be the customer or the vendor. The originator must provide bank and the requisite details such as the account number and routing number. This information must be accurate in order for the transfer to be successful. ACH has designated days and times when it processes transactions, which allows businesses to plan payments accordingly. Furthermore, the networks are secure and feature built-in fraud protection.
In contrast, EFT transactions are initiated at the discretion of the payee. The payee has to provide the account information that must have consistency with the receipt’s bank requirements. As direct debit transactions are linked to bank accounts, processing times of EFT are generally shorter. Bank transfers of EFT are also more reliable because there are fewer declined payments due to broken links with the payee’s bank account.
Executives evaluating the differences between ACH and EFT must consider the time-sensitivity of their transaction. They should also consider the cost of both payment systems, as well as its safe transfer of data. The right payment system must offer enough security and cost-effectiveness to fit the organizations needs.
By understanding the nuances of ACH and EFT payments, finance executives can make informed decisions when selecting payment software solution. This can equip the organization with robust system to handle the demands of faster, safer, and scalable payments. By succeeding in this, C-suite executives can empower their organization to glean the limitless opportunities presented through effective payment processing.
