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Unless you’ve recently written a cheque, you’re likely using EFT payments without realizing it. They’ve become the backbone of how many individuals and businesses transfer money securely in today’s digital-first world.
However, while EFTs are widely used by consumers and businesses alike, traditional EFT options offered by banks and financial institutions often fall short. They only scratch the surface of what this payment solution can achieve when embedded into a business's financial operations.
This guide explores the ins and outs of Electronic Funds Transfer (EFT) payments in Canada, including:
Electronic Funds Transfers (EFTs) are digital transactions that move money securely between financial institutions. In Canada, EFTs are a cornerstone of the payment system, allowing businesses to credit or debit bank accounts electronically in CAD or USD.
As digital payments become essential to modern businesses, EFTs eliminate the inefficiencies of paper cheques and the high costs of credit cards.
According to PYMNTS:
With EFTs holding a majority market share and growing rapidly, Canadian businesses are increasingly relying on these transactions to drive efficiency and reduce costs.
Across their many forms, EFT transactions make up the electronic banking industry. Each EFT payment type shares one common element—they’re all connected to the Canadian banking network. The big distinction in EFT banking is whether or not it requires human interaction to complete the transaction.
EFT transactions span various forms, all leveraging digital banking networks. For simplicity, we focus on EFT debits/credits (eChecks):
Key Use Cases:
EFT Payment Processing Automation: Modern integration with a financial solution provider like VoPay simplifies EFT payment management. Through VoPay's API, organizations can eliminate manual steps, integrate with existing systems, and ensure faster, error-free processing.
While EFTs are reliable, traditional methods often fall short:
Many businesses rely on manual file uploads, spreadsheets, and error-prone reconciliation processes. Transactions are manually submitted by the client with no attached data, requiring additional effort to ensure records are accurate. This is especially time-consuming for recurring payments.
Traditional EFTs offer no real-time insights into transaction status, impacting cash flow management. Businesses cannot verify account details, ownership, or fund availability, which leads to delays and inefficiencies.
Payments often take 3-5 business days to clear, delaying critical operations and introducing uncertainty.
Manual data entry increases the likelihood of mistakes, adding operational costs and potentially straining customer relationships.
Breaking It Down:
Due to these challenges, many companies spend the equivalent of a full 40-hour workweek on EFT payment processing alone. And that’s not even accounting for the cost of errors caused by manual data entry. Did you know that humans make an average of 10 mistakes for every 100 repetitive tasks?
The Solution: Introducing automation into EFT payment workflows. By deploying financial tools like payment links and payment automation solutions customized to your operational needs, you can eliminate errors from manual data entry, improve efficiency, and reduce manual transaction processing to near zero.
By embedding EFT payment technology into your solution, the manual steps of EFT payments can be completely eliminated. This delivers complete control and visibility over your payment processes and financial operations, reducing errors and delays.
All that is needed is the recipient’s bank account information, which typically includes:
In an EFT transaction, there are two main parties:
EFT transactions involve debits (decreases) and credits (increases) to the respective accounts.
Pre-authorized debits (PADs) have become one of the most effective ways for businesses to collect recurring payments and for customers to pay bills automatically. By eliminating manual interactions, PADs streamline the payment process, reduce costs associated with credit card fees, and provide a seamless customer experience.
PAD agreements allow businesses to debit accounts on a single or recurring basis without needing permission for each transaction. This functionality has made PADs indispensable for businesses in industries like property management, subscription services, and utilities. However, traditional PAD processes still present challenges that businesses must address.
VoPay modernizes PAD processes with eLinx Connect. With this solution, businesses can:
Once a standard EFT transaction is initiated, it will follow the following timeline:
Available for businesses that require faster receivables. It is important to remember that EFT payment processing in Canada has daily cut-off times. You can find a list of daily cut-off times HERE.
ACH (Automatic Clearing House) is a US-only network, a counterpart if you will to the Canadian EFT. While EFT is a blanket term for all digital transactions, ACH payments are just one type of EFT. ACH is run by Nacha (National Automated Clearing House Association), which holds the weight of the American payment industry. ACH connects the banks and creates a daily debit and credit tally. The ACH network processes EFTs in batches. Transactions are accrued throughout the day and processed later.
Who wears it better? Introducing online transfers, where the old-fashioned concept of bank wire transfers meets the modern technology of EFT.
Below, we explore the main differences between EFT and wire transfer to help determine who comes out on top.
EFT - The business owner has complete control over when the EFT payment processing occurs, enabling the payments to be debited from their client’s bank account on a particular day.
Wire Transfer - Wire transfers are just as ambiguous as saying the “cheque is in the mail.” The business has very little control over when they get paid.
VoPay's instant EFTs are usually complete within 1-2 business days. Sometimes, these can be processed on the same day or in real time.
Wire transfers typically take 3-5 business days to move money between bank accounts.
EFTs are very cost-effective for businesses.
Wire transfers are more expensive than other EFT methods and can be as high as $50 per international wire transfer. In other words, a bank wire transfer is going to cost you.
Processing costs for various payments are outlined below.
EFT payments are completely digital through a payment facilitator. There’s no need to go to a bank or even leave your office.
Wire transfer - means pack your bags, you are going on a trip. Often, a wire transfer requires taking a trip to the bank, parking your car, and standing in line. This is especially true for larger payments.
VoPay’s Fintech-as-a-Service platform revolutionizes EFT payment processing by embedding automation, compliance, security, and scalability into every transaction. Our solution modernizes traditional EFT systems with features designed for today’s businesses:
With same-day EFT processing, businesses no longer need to wait 3-5 business days for transactions to clear. VoPay’s solution accelerates payment timelines, ensuring improved cash flow and reducing operational delays. This is particularly valuable for businesses managing high volumes of transactions, such as payroll, supplier payments, or recurring bills.
VoPay offers complete transparency with real-time tracking and reporting for every transaction. Businesses can monitor payment statuses, identify potential issues early, and reconcile accounts seamlessly. This enhanced visibility allows for better cash flow management and improved financial forecasting.
By embedding VoPay’s EFT technology into their systems, businesses can automate recurring payments, transaction approvals, bulk transactions, and accounting and payment data syncing. This eliminates manual processes like file uploads and spreadsheet-based reconciliations, reducing human errors and freeing teams to focus on strategic tasks.
Integration of VoPay’s financial solution ensures adherence to industry regulations and compliance standards. With built-in compliance features, businesses can handle sensitive financial data securely while meeting regional and global regulatory requirements. Tokenization and fraud prevention measures enhance trust and reduce risks.
Security is foundational to VoPay’s platform. Bank-level encryption, tokenization, and fraud prevention systems protect sensitive financial data at every stage. These features ensure that businesses can process payments with confidence, reducing the risk of breaches and unauthorized access.
VoPay’s API connects effortlessly with existing systems, including ERPs, accounting software, and custom-built platforms. This allows businesses to embed VoPay’s EFT capabilities directly into their workflows, creating a unified payment experience without disrupting operations in less than three weeks.
VoPay’s platform grows with your business. Whether you’re handling thousands of transactions or expanding to new markets, VoPay’s scalable financial technology supports high transaction volumes and complex payment workflows through its advanced ledger management and multi-tenancy infrastructure.
By embedding VoPay’s EFT technology, businesses reduce reliance on expensive credit card transactions and manual processes, significantly lowering operational costs. With flat transaction fees and no hidden charges, businesses can save thousands annually while improving profitability.
With VoPay’s EFT technology, businesses are equipped for tomorrow’s payment landscape. Open Banking integrations, advanced analytics, and evolving compliance measures ensure that organizations remain competitive and prepared for future industry shifts.
"VoPay's EFT payment technology has streamlined our transactions significantly, minimizing our need to intervene. Investors can securely enter their banking information, click 'pay,' and complete their transaction immediately. This is crucial for our lean team, removing the burden of manual tasks, form collection, and data re-entry. Our goal was to build a scalable operation without needing a large accounting department. With VoPay, we're achieving that, enabling just one person to manage the process." Scott Spence, Head of Growth, Parvis
The 5 questions to ask yourself to see if EFT payments will work for you:
1. Does your business require recurring payments?
2. Do your customers pay by paper cheques?
3. Is there a significant proportion of your customers currently paying by credit card?
4. Would the processing fees for EFT save you money compared to credit card fees?
5. Could you convert your credit card-using customers to pay by EFT instead?
VoPay’s EFT payment technology is more than a tool—it’s the foundation for connecting and simplifying your financial processes.
By integrating our technology, you can unify all aspects of money movement into a single workflow. This ensures your transactions are secure, accurate, and meet compliance requirements while giving you clear oversight of your financial activities.
You decide what features you need, and we’ll handle the setup, making it easier for you to confidently manage your payments. Book a demo today!
