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ACH is a type of EFT. Electronic funds transfer, or EFT, is the umbrella term for any payment moved electronically between bank accounts, and the Automated Clearing House network is one of the rails underneath that umbrella. Wire transfers, card payments, real-time payments, and ATM withdrawals are all EFTs too. So the real question for an AP team is not ACH or EFT, it is which EFT rail to send a given vendor payment on.
What is the difference between ACH and EFT?
EFT describes the category. If money moved from one account to another without paper changing hands, it was an electronic funds transfer. That covers a lot of ground: a wire to an overseas supplier, a card payment for a software subscription, a same-day RTP payment, a direct deposit into an employee's account.
ACH describes one specific rail inside that category, and in the United States it is the workhorse. ACH transactions are batched, submitted to the Automated Clearing House network through your bank, and settled on a set schedule rather than one at a time. That batching is why ACH is cheap and why it is not instant.
Asking whether you should use ACH or EFT is a bit like asking whether you should drive a sedan or a vehicle. The useful comparison is between the rails.
ACH vs the other EFT rails, side by side
| ACH | Wire transfer | Card | RTP / FedNow | |
|---|---|---|---|---|
| Speed | 1 to 2 business days standard, same day available | Same day, often within hours | Authorization instant, settlement in days | Seconds, 24/7 |
| Typical cost to send | Cents to a few dollars, often free in bulk | $15 to $50 domestic, more internationally | 2% to 3% borne by the vendor | Low per-item, varies by bank |
| Reversibility | Returns possible within defined windows | Effectively final once sent | Chargebacks available | Final, no reversal |
| Reach | US bank accounts | Domestic and international | Anywhere the vendor accepts cards | Participating US banks only |
| Best AP use | Routine vendor bills, payroll | Large, urgent, or international payments | Small recurring vendors, rebate capture | Time-critical domestic payments |
Is ACH an EFT?
Yes. Every ACH transaction is an EFT, but not every EFT is an ACH transaction. Banks and vendors often use the two words loosely, and that is where the confusion starts. If a supplier's remittance form asks for "EFT details," they almost always mean they want your bank routing and account number so they can pay you by ACH. If they ask for wire instructions, they mean something else and the fee will be much higher.
The reason it matters for AP is fraud. A vendor emailing to say their "EFT details have changed" is one of the most common openings in a business email compromise attack, precisely because the term is vague enough that nobody stops to ask what it means. Any change to payment details, whatever it is called, should be verified by calling the vendor on a number you already had on file, never on the number in the email. Our guide to business email compromise in accounts payable covers how those attacks run.
Which is better for paying vendors, ACH or a wire?
For routine domestic bills, ACH wins on cost and it is not close. A wire can cost $25 to send; an ACH payment costs pennies. Across a few hundred payments a month that difference is real money, and the vendor gets the funds in a day or two either way, which is fine for an invoice that was on net 30 terms anyway.
Wires earn their fee in three situations: the payment is large enough that settlement risk matters, the payment is international, or the payment is genuinely urgent, such as a closing or a release of goods sitting at a port. The finality of a wire is a feature in those cases and a liability in every other case, because a wire sent to a fraudster is essentially gone. ACH gives you a return window; a wire does not. We compare the two in more depth in ACH vs wire transfer.
Why AP teams still send checks, and why they should stop
Checks remain surprisingly common in US business-to-business payments, usually for one of three reasons: the vendor never gave bank details, the AP team never asked, or somebody believes checks are safer. The last one is backwards. Checks carry routing and account numbers printed on the front, travel through the mail, sit in unlocked mailboxes, and are the most-defrauded payment instrument in US business banking.
They also create work that never ends. Every check that goes uncashed becomes an outstanding item on the bank reconciliation, then a stale dated check, then a potential unclaimed property filing. An ACH payment either lands or fails, immediately, with a reason code. When a payment does need chasing, being able to pull the invoice details automatically rather than digging through PDFs to find what was billed shortens the loop considerably.
How to move your vendors onto ACH
Collect bank details at onboarding, not at payment time. A vendor who is already set up with verified banking information gets paid by ACH by default; a vendor who is not gets a check, and that default is how check volume creeps back. A vendor onboarding flow that requires the W-9 and the bank details before the vendor is marked payable fixes this permanently.
Then batch the payments. A weekly payment run that sweeps every approved invoice due in the next cycle, sends the ACH file to the bank, and emails remittance advice to each vendor turns payments into a scheduled task instead of a stream of one-off requests. That is what vendor payment software is for, and it is where the cost per payment really drops: not from the ACH fee itself, which is already tiny, but from the labor that surrounds each payment.
Frequently asked questions
Is ACH the same as EFT?
No, ACH is one kind of EFT. Electronic funds transfer is the umbrella term for any electronic movement of money between accounts, including wires, card payments, real-time payments, and direct deposits. ACH refers specifically to payments routed through the Automated Clearing House network, which settles in batches rather than one transaction at a time.
How long does an ACH payment take?
Standard ACH credits typically settle in one to two business days. Same-day ACH is available through defined submission windows for an extra fee, subject to a per-transaction limit set by Nacha. ACH does not settle on weekends or bank holidays, which is why a Friday payment run can land the following Tuesday.
Is EFT cheaper than a wire transfer?
ACH, which is the EFT rail most businesses mean, is far cheaper than a wire. ACH payments generally cost cents to a few dollars, while a domestic wire commonly runs $15 to $50 and international wires cost more. For routine vendor bills that are not urgent, ACH is the sensible default and the wire fee is money spent on speed you did not need.
Can an ACH payment be reversed?
In limited circumstances. Nacha rules allow an originator to reverse an ACH entry for specific reasons, such as a duplicate payment or a wrong amount, within a defined window and with notice to the receiver. It is not a general undo button, and it is not guaranteed to recover the funds if the receiving account has already been emptied. It is still more recourse than a wire gives you, which is none.