ACH vs INTERAC: Which Payment Method for Your Business?

Many Canadian businesses are surprised to discover they have a choice between two fundamentally different bank-to-bank payment methods: EFT (Electronic Funds Transfer, the Canadian equivalent of ACH) and INTERAC e-Transfer. Both move money between bank accounts without credit cards, but they operate on different rails, have different costs, different speed profiles, and different ideal use cases. Choosing the right one — or knowing when to use both — can meaningfully improve your payment operations.

Quick Overview: What Each Method Does

EFT/ACH is a batch payment system operated through Canada's ACSS (Automated Clearing Settlement System). It processes transactions in daily batches, with funds typically available T+2 (two business days after submission). EFT supports both push payments (you send money to someone) and pull payments (you pull money from someone with their pre-authorized consent). It is the system behind payroll, direct deposits, and pre-authorized debit billing.

INTERAC e-Transfer is Canada's consumer-facing electronic payment service, where senders initiate transfers through their online banking and recipients receive funds via email notification. With Autodeposit, funds are deposited in real-time. It is designed for customer-initiated push payments — the customer sends money to you, rather than you pulling it from them.

Side-by-Side Comparison

Speed Comparison

INTERAC e-Transfer wins on speed by a wide margin for individual transactions. With Autodeposit enabled on your account, funds land in real-time — within seconds of the customer initiating the transfer. This is a significant advantage for any situation where immediate confirmation of payment is important.

EFT operates on a batch cycle tied to Payments Canada's ACSS clearing windows. Even if you submit a file at the start of the business day, funds will not be available until T+2 at the earliest. This is a meaningful cash flow consideration for businesses that collect many payments on the same day and need immediate access to funds.

However, EFT has a key advantage: it can be fully automated and merchant-initiated. With a PAD agreement in place, your billing system can automatically debit customers on their due date without any action required from the customer. INTERAC e-Transfer requires the customer to log into their banking app and initiate each transfer — which creates friction for recurring payments.

Cost Comparison

Both methods are substantially cheaper than credit cards, but the cost comparison between EFT and INTERAC depends heavily on your banking arrangements:

• EFT through a payment processor (e.g., TIB Finance): Typically $0.25–$1.00 per transaction flat fee, regardless of the transaction size. For large amounts, this makes EFT dramatically cheaper.
• INTERAC e-Transfer: Many business banking plans include a set number of e-Transfers per month, making individual transfers effectively free within that limit. Above the limit, fees are typically $1.00–$1.50 per transfer. For the recipient, deposits via Autodeposit are typically free.

For a $500 transaction, EFT costs roughly $0.50 and INTERAC costs $0–$1.50. The difference is minimal. For a $10,000 invoice, EFT at $0.50 is far cheaper than any per-percentage card fee, and both methods are similarly priced on a flat-fee basis.

The hidden cost of INTERAC for high-volume receiving is the manual effort required without automation — someone must reconcile incoming transfers to invoices. This cost largely disappears with API integration. See our guide on INTERAC e-Transfer for business for integration options.

Transaction Limits

Per-transfer limits are a critical consideration. INTERAC personal e-Transfer limits are set by the sender's bank, typically $3,000 per transfer and $10,000 per day. For invoices over $3,000, a customer would need to send multiple transfers — which is friction, and practically impossible for large B2B invoices without business-tier banking.

EFT has no practical per-transaction cap for business use. A single PAD can debit $50,000, $500,000, or more, subject only to your processor's risk parameters and your customer's account balance. This makes EFT the clear choice for large-value B2B transactions. For recurring billing of large amounts, there is simply no substitute for pre-authorized debits.

Best Use Cases for EFT/ACH

Best Use Cases for INTERAC e-Transfer

Cross-Border Payments

It is worth noting that both EFT and INTERAC e-Transfer are domestic Canadian payment methods. Neither can be used to send or receive funds from US or international bank accounts directly. EFT operates on Canada's ACSS; INTERAC e-Transfer requires both sender and recipient to have Canadian bank accounts at participating institutions.

For cross-border payments to or from the US, wire transfers or international ACH transactions (via SWIFT or specialized cross-border payment networks) are needed. TIB Finance can advise on cross-border payment solutions as part of a broader payment strategy.

Using Both Methods

The most effective approach for many businesses is to offer both payment methods and let the use case determine which is appropriate:

• Use EFT/PAD for recurring billing and large B2B invoices where automation and amount flexibility matter
• Use INTERAC e-Transfer for one-time consumer payments, deposits, or any situation where you want zero friction for the customer and immediate confirmation
• Accept both and let customers choose, which maximizes payment completion rates

TIB Finance's payment platform supports both EFT and INTERAC e-Transfer with unified reporting, so you can offer both methods without managing two separate systems.

Decision Guide

Use this quick decision framework to determine which method fits your specific scenario:

• Recurring billing where you initiate the payment? EFT/PAD.
• Customer-initiated, one-time payment under $3,000? INTERAC e-Transfer.
• Large invoice over $3,000? EFT.
• Need funds immediately upon payment? INTERAC e-Transfer.
• Sending payroll or vendor payments? EFT (direct deposit).
• Consumer service business with irregular payment amounts? INTERAC e-Transfer.
• SaaS or subscription product with monthly billing? EFT/PAD.

For more on setting up each method, see our deep-dive guides: EFT payments in Canada and INTERAC e-Transfer for business. If you offer recurring billing specifically, our PAD compliance guide is essential reading.