J.P. Morgan clarifies differences between ACH and EFT payments

J.P. Morgan Structured Products B.V. has published material intended to help businesses understand the distinctions between Automated Clearing House (ACH) and Electronic Funds Transfer (EFT) payment methods.

According to J.P. Morgan, EFT is an umbrella term for digital methods of moving money, whereas ACH is a type of EFT that operates through a U.S.-based network. ACH transactions are processed in batches with a one- to three-day settlement time. Other EFT types, such as wire transfers, offer same-day processing at a higher cost.

The company emphasizes that ACH payments are commonly used for payroll and utility bills, offering a cost-effective solution with predictable processing times. Wire transfers are recommended for urgent, high-value transactions requiring prompt completion.

The choice between ACH and other EFT methods should be based on a company's priorities, including settlement speed, transaction costs, volume requirements, and geographic reach. For international transfers, J.P. Morgan cautions about International ACH Transfers (IAT), which can be less expensive but more time-consuming and complex than international wire transfers.