What is EFT Payment?

**An EFT payment (Electronic Funds Transfer) is any digital transfer of money between bank accounts, including ACH transfers, wire transfers, direct deposits, and online bill payments.** EFT is a broad umbrella term that covers virtually every form of electronic money movement in the modern banking system. Rather than describing a single payment method, EFT refers to the entire category of transactions where funds move from one bank account to another without any physical exchange of cash or paper checks. When your client pays your invoice by ACH bank transfer, when your payroll hits your checking account on Friday morning, or when you pay your phone bill online — all of these are EFT transactions. The concept of electronic funds transfer emerged in the 1970s as banks and financial institutions began building shared networks to move money digitally. Before EFT infrastructure existed, businesses relied almost entirely on paper checks, which required physical handling, mailing time, and manual processing at banks. The Electronic Fund Transfer Act of 1978 established the legal framework governing consumer EFT transactions in the United States, setting standards for liability, error resolution, and disclosure requirements that still underpin the system today. Over the following decades, EFT networks expanded dramatically, driven by the growth of automated payroll processing, the rise of online banking, and eventually the smartphone payment revolution. Today, EFT payments account for trillions of dollars in transactions every year across the US economy, touching everything from small freelance invoices to multi-million-dollar corporate settlements. The types of EFT most commonly used include ACH transfers, wire transfers, direct deposit, online bill pay, and peer-to-peer digital payments — each with its own speed, cost profile, and best-use case.

Understanding the different types of EFT payments is essential for freelancers and small business owners who want to get paid efficiently and offer clients flexible payment options. While all EFT transactions share the same basic characteristic — money moves electronically between bank accounts — each type operates on a different network, timeline, and cost structure. **ACH Transfer (Automated Clearing House):** ACH is the workhorse of the US payment system and arguably the most important EFT type for freelancers to understand. The ACH network, operated by Nacha (formerly NACHA), processes transactions in batches rather than individually, which is why ACH transfers typically take 1 to 3 business days to settle. The cost is extremely low — most banks charge $0 to $1 per transaction, and many business bank accounts include a set number of free ACH transfers each month. ACH is used for recurring payroll deposits, vendor payments, subscription billing, and direct bank-to-bank transfers. When a client pays your invoice by entering your bank routing and account number into their banking portal or accounting software, that is almost certainly an ACH transfer. Services like Stripe and QuickBooks Payments use ACH rails on the backend when processing bank transfers. **Wire Transfer:** Wire transfers move money in real time through a separate network (typically Fedwire or SWIFT for international transfers). Unlike ACH, wires settle the same business day, often within hours of initiation. The tradeoff is cost: domestic wires typically cost $15 to $30 to send and $10 to $15 to receive, while international wires can run $30 to $50 or more. Wire transfers are best suited for large, time-sensitive payments — think a $50,000 project deposit, a real estate transaction, or an international client payment where speed is critical. For typical freelance invoices under $5,000, wire fees often make ACH the better choice. **Direct Deposit:** Direct deposit is simply an ACH transfer initiated by an employer or platform to deposit funds directly into a worker's bank account. As a freelancer on platforms like Upwork, Fiverr, or direct client arrangements with net payroll terms, direct deposit means your earnings land in your account without any action required on your part beyond providing your banking details once. **Online Bill Pay:** This EFT type is bank-initiated — your client logs into their bank's online portal, enters your information as a payee, and the bank sends payment on their behalf. Depending on the bank, this may be an ACH transfer or a physical check sent by the bank, so it is worth clarifying with clients which method their bank uses. **Peer-to-Peer (P2P) Payments:** Apps like Zelle, Venmo, PayPal, and Cash App all use EFT rails to move money. Zelle connects directly to bank accounts and transfers are typically instant. Venmo and PayPal can be instant to a linked debit card (with a small fee) or 1 to 3 business days to a bank account. These are popular for smaller freelance payments and informal arrangements, though tax reporting requirements apply regardless of platform. **EFT vs. ACH — The Key Distinction:** A common source of confusion is treating EFT and ACH as synonyms. They are not. ACH is one specific type of EFT — the batch-processing bank-to-bank network. EFT is the broader category that includes ACH, wires, P2P payments, and more. When a client asks to pay via EFT, they likely mean ACH; but it is worth confirming to ensure you give them the right payment details.

As a freelancer, EFT payments are your best friend for getting paid on time — and the data backs this up. Invoices that include clear EFT payment instructions are paid significantly faster than those that rely on check payments or leave clients guessing about how to send money. The advantages of EFT over paper checks are substantial for independent workers. First, speed: a check mailed on Monday might not clear your bank until Thursday or Friday after mailing time, bank processing, and a potential hold period. An ACH transfer initiated on the same Monday typically settles in your account by Wednesday. Second, traceability: every EFT transaction generates a digital record with a confirmation number, making it straightforward to confirm receipt and resolve any disputes. Paper checks can be lost in the mail, can bounce, and leave a messier paper trail. Third, no physical handling required: you do not need to be home to receive a check, drive to the bank to deposit it, or wait through a deposit hold period. To request EFT payment on your invoices, you have several practical options. The most direct is including your ACH banking details — your bank name, routing number, and account number — directly on the invoice in the payment terms section, formatted clearly so clients can initiate a transfer from their bank. This works well for established client relationships where you trust the recipient. Alternatively, you can add a payment link from a platform like Stripe, PayPal, or Square, which allows clients to pay by ACH bank transfer or card without you needing to share your raw banking details. Many freelancers include a line such as: "EFT/ACH accepted — bank details on file. Contact us for wire transfer instructions." Common EFT options freelancers use in practice include: Zelle (instant, free, works directly between bank accounts — ideal for US clients who bank at major institutions), ACH direct deposit (low cost, works universally, best for invoices over $500), PayPal or Venmo Business (familiar to many clients, quick setup, though fees apply for business transactions), and Stripe (professional payment links, accepts both ACH and cards, 0.8% fee for ACH bank transfers). For your client communication, it helps to set expectations about EFT processing times upfront. A simple note on your invoice or in your project contract might read: "Payment via ACH bank transfer typically settles within 1-3 business days. Wire transfer available upon request for same-day settlement." Real-world scenario: A freelance web designer sends a final project invoice for $2,500 to a small business client. The invoice clearly lists ACH payment instructions with routing and account numbers, plus a Stripe payment link as an alternative. The client initiates an ACH transfer from their business bank account on Tuesday afternoon. By Thursday morning, $2,500 clears in the designer's account — no check to wait for, no trip to the bank, and a clean digital record for both parties' accounting software. Compare this to the check alternative, where the same payment might take 7 to 10 days from invoice to cleared funds. Over the course of a year with multiple clients, EFT adoption can meaningfully improve a freelancer's cash flow.

Eonebill is built to make the entire payment collection process seamless for freelancers and small business owners. When you create an invoice in Eonebill, you can include all the EFT payment details your clients need to pay you quickly — whether that is ACH bank transfer instructions, a payment link, or wire transfer information for international clients. Eonebill's invoice templates are structured to accommodate professional payment terms sections where you can clearly display your preferred EFT method, processing time expectations, and any applicable late payment terms. This eliminates one of the most common reasons invoices go unpaid: clients who want to pay but do not know how. Visit the [freelance invoice template](/invoice-template/freelance-invoice) to see a ready-to-use format that includes a dedicated payment instructions section, or use the [free invoice generator](/free-tools/invoice-generator) to create a custom invoice with your EFT details embedded. The combination of clear payment terms and EFT-ready invoice formatting directly impacts how fast you collect. Invoices that include specific payment instructions — including EFT details — consistently outperform vague invoices in payment speed. On Eonebill's Pro and Business plans, you can save your payment details once and have them auto-populate on every invoice you create, eliminating the manual step entirely. Explore Eonebill's plans at [/pricing](/pricing) to find the tier that fits your invoicing volume and payment workflow needs.

Even experienced freelancers trip over the same EFT-related errors repeatedly. Here are the five most common mistakes — and how to avoid them. **Mistake 1: Not Including Bank or Payment Details on Invoices.** This is the single biggest cause of delayed EFT payments. If your invoice says "payment due in 30 days" but does not specify how to pay, clients have to follow up to ask — and that follow-up adds days or weeks to your collection timeline. Every invoice should include your preferred EFT method with complete instructions: either your ACH routing and account number, a payment link, or a note directing clients to contact you for wire details. **Mistake 2: Confusing ACH and Wire Transfer Fees.** Freelancers sometimes request wire transfers for routine invoices without realizing that clients will incur $15 to $30 in fees to send them. This can create friction or resentment — especially for smaller invoices where the wire fee represents a meaningful percentage of the payment. Default to ACH for invoices under $10,000 unless speed is critical, and reserve wire transfer requests for large payments or international clients. **Mistake 3: Not Verifying Client EFT Details Before the Project Starts.** If you plan to collect payment by ACH direct deposit, confirm at the project kickoff that your client is set up to send ACH transfers. Some small business clients still rely on check payments by default and may need time to set up bank transfer capability. Surfacing this early prevents last-minute payment delays at project completion. **Mistake 4: Missing EFT Processing Time in Project Timelines.** If your contract specifies that work resumes or deliverables are released upon receipt of payment, make sure both you and your client account for ACH's 1 to 3 business day processing window. A client who initiates ACH payment on a Friday afternoon may not see the funds clear until the following Wednesday — that is a gap that can stall project timelines if not anticipated. **Mistake 5: Not Keeping EFT Transaction Records for Tax Purposes.** Every EFT payment you receive as a freelancer is taxable income, regardless of which platform or method was used. Save confirmation emails, download transaction records from your banking portal quarterly, and reconcile them against your invoices in your accounting system. The IRS does not distinguish between a check payment and an ACH transfer — both count equally as income, and both need to be documented.

**Q: What does EFT stand for?** EFT stands for Electronic Funds Transfer. It is a broad umbrella term for any digital transfer of money between bank accounts, including ACH transfers, wire transfers, direct deposit, online bill pay, and peer-to-peer payment apps. **Q: Is EFT the same as ACH?** No. ACH (Automated Clearing House) is one specific type of EFT, but the two terms are not interchangeable. Think of EFT as the category and ACH as one method within that category. All ACH transfers are EFT transactions, but not all EFT transactions are ACH transfers — wire transfers, Zelle payments, and PayPal bank transfers are also EFT but operate on different networks. **Q: How long does an EFT payment take to arrive?** It depends on the type of EFT. ACH transfers typically take 1 to 3 business days. Wire transfers generally settle the same business day, often within a few hours. Zelle transfers between supported banks are usually instant. PayPal and Venmo transfers to a bank account take 1 to 3 business days unless you pay the instant transfer fee. **Q: How do I request EFT payment on my invoice?** Include your bank routing number and account number in the payment terms section of your invoice for ACH transfers, or add a payment link from Stripe, PayPal, or a similar platform. A simple note like "EFT/ACH payments accepted — see bank details below" makes it clear to clients that electronic payment is available and preferred. **Q: Is EFT safe for freelancers?** Yes, EFT payments are generally very safe. ACH and wire transfers operate through regulated banking networks protected by bank-level encryption and the Electronic Fund Transfer Act, which provides legal protections for unauthorized transactions. Payment platforms like Stripe and PayPal add additional fraud monitoring layers. The main precaution is verifying the identity of anyone you share banking details with — provide ACH information only to known, trusted clients, or use a payment link instead to avoid sharing raw account numbers.

Understanding EFT payments is easier when you know the related terminology used across invoicing, banking, and freelance finance. **ACH Payment:** The specific EFT method that uses the Automated Clearing House network for batch-processed bank transfers. See the full definition at [/glossary/ach-payment](/glossary/ach-payment). **Wire Transfer:** A real-time EFT method used for same-day, high-value payments. Higher cost than ACH but faster settlement. See [/glossary/wire-transfer](/glossary/wire-transfer). **Payment Terms:** The conditions on your invoice that specify when payment is due, accepted methods, and any late fees. See [/glossary/payment-terms](/glossary/payment-terms). **Net-30:** A common payment term meaning payment is due within 30 calendar days of the invoice date. Often paired with EFT instructions for efficient collection. See [/glossary/net-30](/glossary/net-30).

Put your EFT payment knowledge to work with these Eonebill invoice templates, both designed to include clear payment instructions sections so clients always know exactly how to pay you. **Standard Invoice:** A clean, professional invoice template suitable for most freelance and small business billing. Includes a payment terms section where you can add your ACH or EFT details. Access it at [/invoice-template/standard-invoice](/invoice-template/standard-invoice). **Freelance Invoice:** Optimized for independent contractors with fields for project descriptions, hourly or project-based billing, and payment method instructions. Access it at [/invoice-template/freelance-invoice](/invoice-template/freelance-invoice).