Having multiple options is never a bad thing for your business – particularly when you want to send money from one account to another.
How you choose to send money, whether from business to client or business to business, is important for your success, relationships and long-term viability. That makes choosing the right money transfer even more important.
It’s even harder when there are several options available for you. But we know that two stand out above the rest: Interac Online or Electronic Funds Transfer (EFT).
Let’s take a look at each of these options and determine what might be best for your business operations.
What is Interac Online?
Interac Online – commonly known as Interac e-Transfers – is one of the quickest ways to transfer money from one person to another. It allows you to pay for goods and services on the internet from anywhere, with funds arriving in less than 30 minutes.
TD Bank notes how simple it is to use it, saying, “to send money using the Interac e-Transfer® service, the account number of the recipient does not need to be known – only their email address or mobile number is required.”
What are the Pros & Cons?
The ease of sending, requesting and receiving money from anyone in Canada – be it business or consumer – streamlines the payment processes for companies, making it an integral part of their cash flow. The auto-deposit service also enhances the translation process, saving time for both parties while being safe thanks to encryption, confidential user IDs and passwords and secure logins.
The most significant disadvantage of Interac Online is the lower transaction limit. Most banks place a limit of up to $3,000 per day, which can be difficult when more large sums of money from account to account.
Best For…
- You need money transferred immediately
- The sum is less than $3,000
- Auto-deposit streamlines accepting payments
- Great for both consumer and business transactions
What is an EFT (Electronic Funds Transfer)?
An EFT, also known as an Electronic Funds Transfer, is when you move money from one bank account to another financial institution.
The process, as defined by EBanx, states that:
“There are two parties: the sender of funds, and the receiver of funds. Once the sender initiates the transfer, the request channels through a series of digital networks originating from either the internet or a payment terminal to the sender’s bank, and then to the receiver’s bank. Senders can be anyone from an employer, to a business, to an individual paying a vendor for a service such as electricity. Likewise, recipients can be entities like employees, goods suppliers, retailers, and utility companies. Most payments are cleared, that is complete, within a couple of days. “
What are the Pros & Cons?
EFTs generally have much higher transaction rates, making it easier to move large sums of money across accounts. In some cases, it could be as large as $10,000 or more.
EFTs also allow you to transfer money between accounts automatically, setting up a time, date and amount. They offer the same security and convenience as Interac transfers, reducing administrative costs, removing the need for the bank and simplifying bookkeeping.
The most significant negative is that EFTs are generally “held”, meaning it can take the bank a few days to move and appear in an account. In most cases, that is usually 2 to 3 business days. This can be detrimental to cash flow and debt payments, making it more important to transfer the money earlier or on time.
Best For…
- Transferring sums over $3,000
- If you can wait for payments
- Great for both consumer and business transactions
- Can set automatic payments to streamline processes
The Bottom Line
On the surface, both of these services offer similar benefits.
The key differences lie in the amount you need to transfer and the speed you need to deliver them. These are the defining terms to determine which business payment solutions work for your business needs.
Consider your timeframe, cash flow and payment processes to choose which option is best for you. In many cases, having both can ensure you have experience the best of both worlds with minimal stress.