Your business already pays employees and vendors electronically. It’s faster than paper checks and easy to track—but what exactly are you using? In most day-to-day scenarios, that’s an EFT. In the U.S., many business-to-business EFTs run over the ACH network. You’ll also hear about wire transfers, which move money on a different rail.
This guide explains EFT vs. wire transfers, key benefits of each, and when to choose one over the other.
What Is an EFT?
EFT (Electronic Funds Transfer) is an umbrella term for money moved electronically no paper cash or checks. Common EFT types include:
· ACH transfers (direct deposit payroll, vendor payments, bill pay)
· Card transactions (debit/credit at POS or online)
· Online/phone banking transfers
· ATM transfers
· eCheck conversions (checks converted to electronic entries)
Most ACH-based EFTs settle in 1–3 business days. They’re low-cost, easy to reconcile, and ideal for payroll, vendor invoices, subscriptions, and routine bill payments.
In short: EFT = electronic movement of money; ACH is one of the primary EFT rails used for business payments.
What Is a Wire Transfer?
A wire transfer is a specific type of EFT that sends funds bank-to-bank over domestic or international wire networks (e.g., Fedwire/CHIPS domestically). Wires are designed for speed and finality, often arriving Same Day ACH Payments (sometimes within hours) and commonly used for high value, time-sensitive payments like real estate closings, vehicle purchases, or urgent vendor deposits.
EFT vs. Wire: Key Differences
1) Speed
· EFT (ACH): Typically, 1–3 business days; batching and bank posting windows apply.
· Wire: Typically, same day or next business day; fastest for urgent settlements.
2) Cost
· EFT (ACH): Lower cost per payment; well-suited for frequent, recurring, or high-volume payouts.
· Wire: Higher fees (often charged to sender and sometimes recipient); efficient for large, infrequent transfers where speed matters.
3) Amount & Use Case
· EFT (ACH): Great for payroll, vendor bills, subscriptions, retainers, and routine AP/AR.
· Wire: Preferred for high-value or time-critical one-offs (down payments, closings, large B2B settlements).
4) Finality & Reversals
· EFT (ACH): Entries can be returned for specific reasons (e.g., insufficient funds, invalid account, unauthorized); dispute windows apply.
· Wire: Generally treated as final once sent and posted; errors can be hard to reverse.
5) Operations
· EFT (ACH): Requires customer authorization for debits; supports scheduled/recurring pulls and push payments.
· Wire: Initiated by the sender with beneficiary details typically, manual review and bank verification.
When to Choose EFT vs. Wire
Choose EFT (ACH) when you need to:
· Pay payroll and routine vendor invoices on schedule
· Collect subscriptions, retainers, or installments
· Minimize processing costs across many transactions
· Automate recurring AP/AR workflows
Choose a wire transfer when you need to:
· Send large, one-time payments
· Meet a strict deadline (same-day arrival)
· Provide immediate proof of funds or settlement finality
Examples
· Payroll & AP: EFT/ACH direct deposit and vendor pay runs scheduled ahead of due dates.
· Real estate down payment: Wire transfer for rapid, confirmed settlement.
· Monthly SaaS billing: EFT/ACH debit with prior authorization.
· Urgent escrow top-up: Wire to ensure arrival within hours.
Bottom Line
· EFT is the broad category; ACH is the workhorse rail businesses use for low-cost, routine payments.
· Wire transfers are a specialized EFT—faster and costlier, best for high-value, time sensitive transactions.
How Liftoff Platform Fits In
Liftoff Platform supports modern payment operations so you can:
· Run ACH/EFT for payroll, vendor payouts, subscriptions, and invoicing
· Use wires when speed and finality matter most
· Automate recurring billing, streamline approvals, and reconcile faster with clear reporting