Electronic funds transfer (EFT) and ACH transactions are terms used to describe money transfers between banks and bank accounts that are performed electronically.  ACH is an acronym that stands for Automated Clearing House.  ACH transactions are a specific type of electronic transfer.  An electronic funds transfer is a non-specific term that describes any type of money transfer performed electronically.

EFT is a generic term used to describe any electronic payment including ACH transactions.  EFTs can be transfers conducted using a bank’s automated teller machine, online banking, a merchant’s point-of-sale terminal, mobile banking, a debit card transaction, remote banking processes, as well as through automated clearinghouse systems (ACH).  Automated Clearing House (ACH) is an electronic network for financial transactions.  The ACH Network is an electronic funds transfer network which enables financial institutions that participate in the service to engage in a variety of electronically transmitted payment uses.

The ACH Network works as a shared processing and delivery system that provides for the distribution and settlement of electronic credits and debits among the participating banks and financial institutions.  Some common examples of ACH transactions include direct deposit of payroll, government benefits, and other recurring income payments into a bank account and automatic transfers from a bank account for bill payments.

Regulation E was established by the Federal Reserve Board to ensure consumers of a minimum level of protection in disputes arising from electronic funds transfers and ACH transactions.

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