EFT vs. Wire Transfer

By Remitbee - May 3, 2022

Wire transfers and EFTs are the most widely used money transfer technologies worldwide. Even though EFTs and wire transfers may appear to be very comparable at first surface level, there are a lot of significant – if somewhat subtle – distinctions that you should be aware of.

What is EFT?

EFT is short for Electronic Fund Transfer. Technically, the term 'EFT' pertains to any digital transfer of funds from one account to another.

This term is used when both the sending and receiving accounts are held by the same financial institution and when the transfer is accomplished among accounts held by different financial institutions.

A computer system performs an electronic money transfer without the need for human interference. The term "electronic funds transfer" refers to a wide range of electronic payments, including, but not bound to, the following:

  • Automated teller machine (ATM) transfers
  • Bank transfers
  • Computer-based transfers, including online transfers
  • Direct deposits and debits of funds
  • Magnetic tape or card payments
  • Point of sale transfers
  • Telephone instructed transfers

What is Wire Transfer?

A wire transfer is a digital transfer of funds among individuals or entities through a network of banks and non-bank financial institutions (like money transfer agents and specialist money transfer institutions).

Rather than physically transferring money, the remittance institution instructs its receiving partner to remit its reserve funds to the beneficiary account referenced via an encrypted messaging system, such as the SWIFT network.

After receiving these commands, the two institutions can settle the payment details to document the transfer of funds. Do remember that reversing a transfer due to incorrect information you or the other party input can be tough to do. So make sure to double-check all the information you put in before submitting it.

Key Differences between EFT and Wire Transfer

It helps to know the difference between these two financial products and processes before you can make the best decision when withdrawing your money. Here are some of the key differences between the two.

Accessibility of Funds after Transfer


The time for EFT payments is determined by the type of payment you use. In most cases, EFT payments will be cleared within the next business day or up to three working days. They may extend this time if you transfer money internationally or send a large sum of money.

Wire Transfer:

Wire transfer payments are frequently processed immediately. On the other hand, international wire transfers can take several business days.

Types of Payments


Various types of payments fall under the category of electronic fund transfers.

Direct deposits: It's frequently used by businesses to pay employees since they can pre-arrange deposits in another account on a planned schedule day.

Credit/debit cards: Usually used to make online buys, bill payments, or transfer funds from one account to another. ATMs: ATMs allow you to check your bank account balance and withdraw or deposit funds without having to go to your bank.

Wire Transfer:

Wire transfer payments can take the following forms:

A bank-to-bank transfer - A method of sending money from one bank to another, either domestically or internationally. A transfer made or initiated by a non-bank institution like money transfer service providers. These can send money within the country, but they are most popularly used for international transfers.

Transfer Fees

EFT: Fees for electronic fund transfers are highly dependent on the type of EFT payment you make. For example, an ATM withdrawal in your home currency may be free of charge, but a withdrawal from a foreign ATM may be subject to fees.

On the other hand, direct deposits are a popular form of payment among businesses due to their low fees.

Wire Transfer:

Wire transfers typically have higher service charges than electronic fund transfers due to the speed they are processed. Domestic wire transfers through banks charge $15 for incoming transfers and $25 for outgoing transfers. Incoming and outgoing international transfers charge $15 and $45, respectively.

You should also know the currency exchange margins charged by your provider for currency exchange when making international transfers.


EFT: EFTs are generally safe and dependable. Other EFTs, however, have some risks and vulnerabilities that require increased vigilance on the part of users when compared to wire transfers. The following are the most common potential risks to be aware of:

ATMs may go offline, resulting in a loss of connectivity to customer accounts and important updates on issues such as stolen cards.

  • POS terminals can be vandalized and rendered inoperable as a result.
  • Card payments (debit or credit) are increasingly vulnerable to card fraud.
  • But EFTs are starting to gain ground in terms of fraud prevention.

Payment networks such as Visa and Mastercard have developed technologies such as tokenization, biometrics, EMV chips, and predictive analytics to combat cyber fraud.

Wire Transfer:

Parties involved in wire transfers are typically checked and their information verified following strict (AML/CFT) policies. Financial instructions are also transmitted via a secure messaging system like SWIFT or Fedwire.

Furthermore, regulatory agencies require banks and money transfer companies to use encryption technologies like SSL to secure client communications. Thus, many prefer wire transfers over EFT because of security concerns.

RemitBee Money Transfer

Aside from wire transfers and electronic funds transfers, there are several other options for transferring money. Remitbee, an online money transfer service provider that you can use anywhere globally, is one of these options.

Its systems are safeguarded by cutting-edge fraud detection and security technology. Plus, all transfers above $500 are free. Remitbee charges no hidden fees and only a small margin to cover business expenses.

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