What counts as an electronic funds transfer
The term describes the instruction, not a particular system. Each kind of EFT runs on its own rails: card networks, the ACH network in the United States, SEPA in Europe, Faster Payments and Bacs in the UK.
In US law the term has a precise meaning. Regulation E (12 CFR Part 1005) defines an electronic fund transfer as a transfer of funds initiated through an electronic terminal, telephone, computer or magnetic tape to order a financial institution to debit or credit a consumer's account. The definition names point-of-sale transfers, cash machine transfers, direct deposits and withdrawals, telephone transfers and debit card transactions.
The same regulation leaves out transfers that start with a paper cheque, and wire transfers through Fedwire or a similar system used mainly between financial institutions or businesses.
EFT in Europe, and for a product team
European law does not use the term. The EU and the UK speak of payment transactions, divided into credit transfers, direct debits and card-based payments, each with its own rules. A product serving both sides of the Atlantic maps the one word to several European payment types, and the consumer protections differ with each.
EFT, ACH or wire transfer?
- ACH
- A US network for batched credits and debits between bank accounts. An ACH payment is one kind of EFT.
- Wire transfer
- A single transfer sent bank to bank, usually of high value. Regulation E excludes wires through Fedwire or similar systems from its definition.
Where an electronic funds transfer shows up in a platform
Modules that do the work
- PayoutsMoney out to bank accounts, cards and wallets, on the rail that fits each payment.
- Accounts & IBANsCustomer accounts with their own IBANs, on the partner bank and the rails you choose.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
Platforms that need it
Where it is written
The laws and standards this page's facts come from.
General information, not legal advice: what applies to you depends on your services and your market.