What EFT means in the Canadian banking context
EFT stands for electronic funds transfer, and in its broadest sense it covers any movement of money between bank accounts that happens electronically instead of by cash or cheque. In everyday Canadian business usage, though, "EFT" refers to something more specific: the batch-based direct payments that move between accounts through Canada's national clearing system, operated by Payments Canada. When your employer direct-deposits your pay, when the CRA deposits a refund, when your utility pulls a pre-authorized debit, or when a company pays fifty supplier invoices in one run, those are EFT payments. It is the Canadian workhorse for routine, scheduled, account-to-account money movement.
Two characteristics define EFT in this sense. First, it is batch-oriented: payments are grouped into files, submitted to the bank, and settled through the clearing system in cycles rather than instantly, which is why an EFT typically lands the next business day rather than the same minute. Second, it comes in two directions: credits, where you push money out (payroll, supplier payments), and debits, where you pull money in with the payer's standing authorization (pre-authorized debits for rent, subscriptions, or installments). If you have heard the terms "direct deposit" and "PAD", both are flavors of EFT. What EFT is not is a brand name; unlike Interac e-Transfer, there is no consumer-facing product called EFT, which is part of why the terminology gets muddled.
EFT vs Interac e-Transfer vs wire transfer vs ACH
The four methods all move money electronically, and that is roughly where the similarity ends. Interac e-Transfer is the consumer-familiar one: near-instant, addressed to an email or mobile number rather than a bank account number, protected by security questions or autodeposit, and subject to relatively low per-transfer limits, which makes it great for person-to-person payments and small business collections but awkward for payroll runs or large invoices. A wire transfer is the opposite end: a bank-to-bank push that settles quickly and (importantly) irrevocably, works internationally, carries the highest fees of the group, and is the standard for large or time-critical amounts like real estate closings and six-figure supplier payments.
ACH is the one that confuses cross-border businesses. The Automated Clearing House is the United States' batch payment network, the American equivalent of Canadian EFT, and the two systems do not directly interconnect: a Canadian EFT file cannot pay a US bank account, and an ACH instruction cannot reach a Canadian one. Companies operating on both sides of the border typically run EFT from a Canadian account for Canadian payees and ACH from a US account for American payees, or use a payments provider that abstracts the difference. US software and documentation often says "ACH" where a Canadian reader should mentally substitute "EFT".
| Method | Best for | Typical speed | Cost character |
|---|---|---|---|
| EFT (Canada) | Payroll, supplier batches, pre-authorized debits | Commonly next business day | Lowest per payment of the group |
| Interac e-Transfer | Person-to-person, small ad-hoc payments | Usually minutes | Low, but limits cap the amounts |
| Wire transfer | Large, urgent, or international payments | Typically same business day | Highest fees; irrevocable |
| ACH (US) | The same jobs as EFT, for US bank accounts | Commonly 1 to 2 business days | Low; US accounts only |
Timelines and cost characteristics, without the fine print
Exact fees vary by bank, account package, and negotiated volume, so treat any specific dollar figure you read online with suspicion and check your own bank's schedule. The relative economics, however, are consistent across institutions. EFT is the cheapest way to move money per payment, typically priced at a small flat fee per transaction or bundled into a business banking package, which is precisely why it is the default for payroll and recurring supplier runs. Wires cost more by an order of magnitude and are usually reserved for the payments that justify it. Interac e-Transfers sit near EFT on price for what they cover, but per-transfer and daily limits keep them out of serious accounts-payable territory. Cheques, the thing EFT replaces, look cheap per unit until you count printing, postage, signing time, follow-up on lost items, and fraud exposure.
On timing, EFT's batch cycles mean you plan around business days: a file submitted today commonly settles in the payee's account the next business day, and banks enforce submission cut-off times, so payroll teams typically transmit a few days ahead of pay date. Wires settle fastest but cannot be recalled once sent, which makes verification of the destination account genuinely important. E-Transfers are near-real-time but bounded by their limits. None of this fine print is exotic; it just needs to be built into your payment calendar, and it is exactly the kind of scheduling an ERP handles well once payments run through it.
- EFT: cheapest per payment, batch-based, plan around next-business-day settlement and cut-off times.
- e-Transfer: near-instant, capped by limits, fine for ad-hoc amounts, wrong tool for AP runs.
- Wire: fastest and irrevocable, priced accordingly, verify destination details carefully.
- Always confirm current fees and limits with your own bank; they vary by package and volume.
How businesses run EFT batches from an ERP like Odoo
The manual version of business EFT is logging into online banking and keying payments one by one, workable at five suppliers, painful at fifty, and error-prone at any volume because the amounts are retyped from whatever the accounting system says. The integrated version inverts the flow: the ERP is where vendor bills already live, so the ERP generates the payment batch. In Odoo, an accounts-payable clerk selects the approved vendor bills due for payment, groups them into a batch, and the system produces a bank-ready EFT payment file from the banking details stored on each vendor record. That file is uploaded to the bank's business portal (or transmitted directly where the bank supports it), the bank runs the batch, and every payment in it is already recorded against the right bills in the ledger the moment it is created.
A Canadian specific worth knowing: most Canadian banks accept batch payment files in a fixed-width format commonly referred to as CPA 005 (after the Canadian Payments Association standard), though some institutions use their own variants, so the file format is typically configured per bank. In Odoo this is commonly handled through Canadian localization or community payment-file modules, and the setup details differ by bank and Odoo version, which is why we treat the bank file format as a checklist item in every Canadian accounting implementation rather than an afterthought. We wrote up the bank-by-bank specifics in our guide to Odoo EFT integration with Canadian banks, and the same batch logic applies on the receivables side, where customer pre-authorized debits can be generated from subscriptions or invoices. Setting this up end to end, vendor bank data, file format, bank portal testing, is the kind of project our integration team runs regularly.
Reconciliation: closing the loop on every payment
Sending payments is half the workflow; proving they cleared is the other half. Reconciliation means matching each line on the bank statement to the corresponding entry in your books, and it is where batch payments either pay off or pile up. When EFT runs from the ERP, each batch is already a structured object in the system, so when the bank statement comes back, imported automatically through a bank feed or as a statement file, the ERP can match the settled batch against the payments it created, flag anything returned (a closed account, an NSF pre-authorized debit), and leave the exceptions as the only manual work. Odoo's bank reconciliation, for instance, suggests matches from amounts, dates, and references, and remembers matching rules over time, so a fifty-payment EFT run typically reconciles in one motion rather than fifty.
This is also where payments meet the rest of your Canadian compliance picture. Clean, reconciled payment records are what make GST/HST filing, payroll remittances, and year-end audit requests routine instead of forensic. If you are building out the Canadian finance stack around your payments, our guides on how GST/HST works for Canadian online sellers and which province's sales tax rate to charge cover the tax side of the same pipeline. The through-line is the one this whole article has been building: money movement, bookkeeping, and compliance get dramatically simpler when they all run from one system instead of being stitched together after the fact.
See how Odoo EFT works with Canadian banks →