What is an electronic funds transfer?

At a glance

How it works

For a merchant, the EFT that matters most is the deposit. It is the money that lands in your account after a card sale. The same system also moves payroll and bill payments.

Payments Canada calls the ACSS Canada's retail batch system for electronic and paper payment items. It says the system clears and settles most everyday retail payments. These include cheques, pre-authorized debits, direct deposits, bill payments and ABM transactions. Batch means items are grouped and sent together.

1. A business or a person gives the bank an instruction. It might be a payroll deposit or a pre-authorized debit.
2. The bank puts the item in an Automated Funds Transfers File. It swaps that file with the other bank through the ACSS.
3. The system clears and settles the items between the banks.
4. The receiving bank posts the money to the account. Both sides then see it on their bank statements.

AFT debits include pre-authorized debits. AFT credits include direct deposits.

A Canadian example

A café in Laval rings up $2,000 in card sales on a Monday. The processor sends the sales to the café's bank account as a deposit, less fees. Say the fees for those sales were $50. The deposit is then $1,950. The café's statement may call that line funding, a deposit or an EFT. The wording varies by processor. The café checks that $2,000 less $50 matches the $1,950 in its account. That check takes two minutes and catches errors early. This is an example only, not a quote. No rate is used, because the fees depend on your own agreement.

What is different in Canada and Québec

• Little differs by province. Payments Canada runs the ACSS for the whole country, including Québec. The same bank-to-bank steps apply in Laval and in Vancouver. Your card sales reach your account the same way in any province.
• Lynx is a separate system for large payments. It moves Canadian dollars between banks, and the transfers cannot be reversed.
• A new real-time system, the Real-Time Rail, is still being built.
• Interac e-Transfer is its own service. Our e-Transfer article covers it.

What it costs and where it shows on your statement

Payments Canada's pages list no fee for a merchant. Your bank or processor sets any charge. Read your agreement to see it. In general, a deposit of card sales arrives net of fees. Find the deposit on your bank statement. Then match it to your processor statement. Sales, less each fee line, should equal the deposit. If they do not, ask your processor why. It is a simple check, and it is worth doing each month.

Where CleverPays fits in this step

Payments Canada owns the ACSS, and banks swap items through it. Your acquirer sends the deposit of your card sales to your bank. CleverPays is operated by Groupe Heo Inc., an Agent of Fiserv Canada Ltd. We do not clear, settle or move bank transfers.

We can read a recent statement with you and show the effective rate and each fee line. We will walk you through the deposit lines and how they connect to your sales. If a deposit looks short, we can help you work out which fee explains the gap. We can answer in English and French.

Common mistakes

• Reading the deposit as your sales total. The deposit is usually lower, because fees come out first.
• Mixing up EFT with Interac e-Transfer. They are different things, run by different companies.
• Assuming a deposit arrives the same day. Ask your processor when deposits land and on which days. Weekends and holidays can change that.

Related terms

• Pre-authorized debit: a bank debit the customer has agreed to in writing.
• ACSS: Payments Canada's batch system for retail payments.
• Funding: the deposit of your card sales into your bank account.
• Lynx: Payments Canada's high-value payment system.
• Interac e-Transfer: Interac's service for sending money between accounts.
• Merchant account: the account that lets you accept card payments.

Common questions