Global Payment
EFT in Canada: How Electronic Funds Transfer Works (Timelines, Costs, vs Interac)
EFT is the Canadian batch payment rail run by Payments Canada (ACSS). Learn how it works, how long it takes, what it costs, how it compares to Interac and wire, and what Real-Time Rail changes.
"EFT" gets used loosely. Many countries call any electronic bank transfer an EFT, and U.S. software often labels Canadian transfers as "ACH." In Canada, EFT specifically means the domestic batch payment system run by Payments Canada — the rail behind payroll deposits, supplier invoices, and pre-authorized debits. This guide explains how it actually works for a Canadian business, what it costs, and where it stops being the right tool.
What Is EFT in Canada?
EFT (Electronic Funds Transfer) is Canada's batch clearing system for bank-to-bank payments in CAD. It runs on the Automated Clearing Settlement System (ACSS), under rules set by Payments Canada, with net positions settled through the Bank of Canada. It is the backbone of recurring and high-volume Canadian business payments.
A few things that make it distinct:
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It is batch, not real-time. Financial institutions collect transfer requests through the day and process them together on a set schedule. That batching is exactly what makes it cheap and reliable at volume.
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It is CAD-denominated. EFT moves Canadian dollars between Canadian accounts. (USD held inside a Canadian account can move too, but the rail itself is domestic.)
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It is not the same as ACH. ACH is the separate U.S. network governed by NACHA. The two are functionally similar — both are batch bank-clearing systems — but they are different rails operated by different authorities. When a Canadian business "makes an ACH payment," what is actually moving is an EFT, unless the payment is genuinely travelling over the U.S. ACH rail (which needs U.S. account details).
The most common EFT flows for businesses are payroll direct deposits, supplier and vendor payments, pre-authorized debits (PAD) collected from customers, bill payments, and CRA remittances.
How EFT Works in Canada: Timelines and Use Cases
A standard EFT settles on a T+2 basis:
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You submit a batch file (or initiate the payment) before your bank's daily cut-off, often around 6:00 PM ET.
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ACSS aggregates and clears the file overnight.
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The Bank of Canada settles net positions between institutions the next morning.
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Funds typically post to the recipient by ~9:00 AM on the second business day.
Weekends and statutory holidays do not count, so a file submitted on Friday settles the following Tuesday.
Most Canadian businesses use EFT for:
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Payroll — salaries and contractor payments landed on a fixed date.
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Accounts payable — supplier invoices paid in batches rather than one wire at a time.
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Pre-authorized debits (PAD) — recurring customer payments (subscriptions, memberships, instalments) pulled on a schedule under a PAD agreement.
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Government remittances — GST/HST, payroll deductions, and corporate tax routed to the CRA.
What EFT is not built for is real-time or urgent movement. If a payment must land today, a wire or Interac e-Transfer is the tool, not EFT.
EFT vs Interac e-Transfer vs Wire
These three rails get confused because they all move money between Canadian accounts. They solve different problems.
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Dimension
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EFT (ACSS)
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Interac e-Transfer
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Wire (SWIFT)
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Operator
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Payments Canada (ACSS)
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Interac
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Bank / SWIFT network
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Speed
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Batch, T+2
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Minutes (near real-time)
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1–5 business days internationally
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Best for
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Recurring, high-volume B2B
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Person-to-person, ad-hoc
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Urgent or non-CAD / international
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Limits
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High; built for volume
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Daily send/receive caps per bank
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Practically unlimited
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Cost
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Low (often <$2 CAD, free at volume)
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Small per-transfer fee
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$15–$50+ CAD plus FX markup
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Multi-currency
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CAD (domestic)
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CAD only
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Any currency
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Audit trail
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Structured (reference fields)
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Basic (sender, recipient, amount)
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Basic
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The practical split: EFT for the recurring batch work, Interac for a quick ad-hoc transfer to a known recipient, and wire for something urgent, high-value, or outside Canada.
EFT Costs and Setup for Businesses
Cost is the main reason businesses default to EFT over wires. Big Five banks differ in structure — some charge a small per-transaction fee, others waive it above a volume threshold, and many bundle it inside a business-banking plan — but EFT is consistently far cheaper than a wire and is the right default for routine CAD payments.
To use EFT as a sender, a business typically:
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Holds a Canadian business bank account with EFT / direct-deposit entitlement enabled.
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Formats a batch payment file (or uses online banking / accounting software that does it for you).
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Meets the daily cut-off to hit the intended settlement date.
To collect via PAD, the business must put a PAD agreement in place with each customer and follow the pre-notification and recall rules under Payments Canada's PAD rules — this is the one part of EFT with real compliance setup, because you are pulling funds rather than pushing them.
The Future: Real-Time Rail (RTR)
Canada is modernising its core payment infrastructure. The Real-Time Rail (RTR), being built by Payments Canada, will introduce instant, 24/7/365 clearing and settlement for Canadian payments — including request-for-payment functionality — and is designed to handle both bank and non-bank participants. RTR does not replace EFT; it adds a real-time layer alongside the existing batch system. For businesses, that means the same recurring EFT batch jobs continue, with an instant option available for the payments that cannot wait two days.
EFT vs ACH: A Note for Canada–U.S. Payments
Because the two rails are so similar, the confusion between them matters most when a payment crosses the border. A Canadian business paying a U.S. supplier hits the gap directly: a standard Canadian account gives you a transit and institution number, not a U.S. routing number, so the payment cannot travel over U.S. ACH and instead goes as a SWIFT wire — $15–$50+ CAD plus FX markup, the exact cost EFT and ACH exist to avoid.
The fix is access to the right local rail on each side: collect CAD through Canada's EFT and pay U.S. recipients over U.S. ACH, from one account.
How a Global Account Handles EFT Collection and U.S. ACH
For a Canadian business that gets paid locally but spends in the U.S. and beyond, a global account such as PhotonPay works as a next-generation payment operating system, combining fiat and stablecoin settlement inside multi-asset accounts.
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Collect CAD through a local receiving account: Open a CAD account with Canadian bank details so your clients pay you in CAD — bypassing international SWIFT entirely and avoiding incoming wire fees.
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Pay U.S. suppliers and SaaS over ACH: Hold a USD account with a U.S. routing number so you can pay American vendors, contractors, and software bills over the ACH network instead of costly SWIFT wires — no U.S. LLC or SSN required.
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Reach beyond North America: Settle through local clearing rails across 200+ markets for suppliers and contractors outside Canada and the U.S., avoiding intermediary deductions.
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Fund card spend with fiat or stablecoins: Fund virtual and physical corporate cards with CAD, USD, or stablecoins such as USDC or USDT, for ad spend, SaaS, and supplier payments.
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Operate within Canadian regulation: PhotonPay is registered with FINTRAC as a Money Services Business, with compliance built into the platform.
FAQs About EFT in Canada
What is EFT in Canada?
EFT (Electronic Funds Transfer) is Canada's domestic batch payment system, run on the ACSS rail under Payments Canada. It moves CAD between Canadian accounts for payroll, supplier payments, pre-authorized debits, bill payments, and CRA remittances.
How long does an EFT take in Canada?
A standard EFT settles on a T+2 basis — submit before the daily cut-off and funds typically post by ~9:00 AM on the second business day. Weekends and statutory holidays do not count.
Is EFT the same as Interac e-Transfer?
No. EFT is a batch system built for recurring, high-volume B2B payments; Interac e-Transfer is a near real-time rail for ad-hoc person-to-person or business transfers, with daily limits and a CAD-only design.
Can a business collect payments through EFT?
Yes. Businesses can receive EFT credits into a Canadian account, and can pull recurring customer payments via pre-authorized debit (PAD) under a PAD agreement that follows Payments Canada's rules.
Is EFT cheaper than a wire?
For routine CAD payments, yes. EFT is a batch system designed for low per-item cost (often under $2 CAD, sometimes free at volume), while a SWIFT wire typically costs $15–$50+ CAD plus FX markup. Reserve wires for urgent or international payments where no local rail exists.
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