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EFT Explained: How Money Moves Between Accounts in Canada

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In Canada, Electronic Funds Transfer (EFT) epitomizes the efficiency of modern financial systems, facilitating direct bank-to-bank transfers with robust security protocols. As a cornerstone of digital transactions, EFT leverages automated clearing house networks, ensuring precise, traceable, and timely fund movement between accounts, essential for sophisticated cash flow management in accounting practices.


Electronic Funds Transfer (EFT) has its roots in the 1960s, emerging as a breakthrough in the financial world with the rise of computerized banking. The 1970s were pivotal for EFT, witnessing the establishment of automated clearing houses (ACH). These developments formalized and standardized EFT processes, enabling functionalities like direct deposits and automated bill payments. EFT in the 1980s and 1990s, experienced rapid growth and diversification. Online banking and electronic payment systems became increasingly common. In today's financial world, Electronic Funds Transfer (EFT) is crucial, covering various methods like wire transfers, direct deposits, and electronic checks.

Screenshot of EFT Process in Canada

Limitations & Benefits

While the system presents several advantages, it's important to acknowledge some limitations too. Let's explore both the benefits and the constraints of the system to gain a comprehensive understanding.

Are EFT transactions cost-effective?

The real cost of EFT encompasses a range of fees, some more apparent than others. Banks typically charge per transaction fees, which can vary based on the type and destination of the transfer. Monthly service fees may also be applied to accounts enabled for EFT transactions, though these can sometimes be waived under certain conditions. International transfers often incur currency conversion fees, calculated as a percentage of the transaction amount.


The timeline of a typical EFT is based on the type of transaction, the banks involved, and whether it's a domestic or international transfer. Generally, domestic EFTs are processed relatively quickly, often within a day. International EFTs can take longer, sometimes several business days, due to additional verification processes and time zone differences.


Are you operating a cross-border business and seeking to handle Electronic Funds Transfer (EFT) transactions as smoothly as a local Canadian entity? Whether it's disbursing payments in CAD to suppliers or receiving funds from customers within Canada, Finofo is your ideal solution. By signing up with Finofo, you gain access to Canadian accounts, removing the complexity of managing cross-border financial operations. This arrangement allows you to conduct your business transactions with the same ease as any local Canadian company. Finofo empowers you to send, receive, hold, and convert money across international borders, while providing the operational simplicity of a Canadian-based entity.

Karthikeyan Sundaram