An EFT, or electronic fund transfer, is any transfer of funds started through an electronic terminal, telephone, computer or magnetic tape to order a financial institution to debit or credit a consumer's account. That is the definition in Regulation E, 12 CFR 1005.3(b). It includes ACH payments, debit card purchases, ATM transfers, direct deposits and phone transfers. It excludes payments that start as paper checks and wire transfers through systems like Fedwire. EFTs from consumer accounts carry Regulation E's protections, including 60 days after a statement to report an error.
What is an EFT payment?
Regulation E, 12 CFR 1005.3(b)(1), defines an electronic fund transfer as "any transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account." The rule lists five kinds it includes:
- point-of-sale transfers
- ATM transfers
- direct deposits or withdrawals of funds
- transfers started by telephone
- transfers from debit card transactions, whether or not an electronic terminal is used
An "account" here is a consumer account: a checking, savings or other asset account held primarily for personal, family or household purposes. A "consumer" is a natural person.
Is an EFT the same as an ACH payment?
An ACH payment is one kind of EFT. The official interpretation of Regulation E lists "a transfer sent via ACH" as a covered transfer. Nacha also uses EFT as another name for ACH payments. But EFT is the wider term. A debit card purchase or an ATM withdrawal is an EFT that never touches the ACH Network.
What isn't an EFT?
Regulation E, 12 CFR 1005.3(c), excludes several transfers. The ones a business meets most often:
| Transfer | Why it's excluded |
|---|---|
| A payment by check, draft or similar paper item | It's originated by check |
| A check sent as an electronic image through check collection | It's part of the check system |
| A wire through Fedwire or a similar system used mainly between banks or businesses | Wire transfers are excluded |
| A check guarantee or authorization service | It doesn't directly debit or credit the account |
One exception runs the other way. When a business uses the numbers from a paper check to start a one-time ACH debit, that is an EFT. See eCheck.
What protections come with an EFT?
For transfers from a consumer account, Regulation E sets out error resolution at 12 CFR 1005.11:
- Time to report. The consumer's bank must handle a notice of error received no later than 60 days after it sends the statement that first shows the error.
- Investigation. The bank must determine whether an error occurred within 10 business days. It reports the results within three business days after that, and corrects an error within one business day of finding it.
- More time. If it can't finish in 10 business days, the bank may take up to 45 days, with conditions such as provisionally crediting the account.
For recurring debits, 12 CFR 1005.10 also requires written authorization and lets the consumer stop a payment by telling their bank at least three business days before it. See ACH debit.
Does Regulation E cover business accounts?
No. Regulation E's error and authorization rules protect consumer accounts. Business-to-business ACH payments are governed by the Nacha Operating Rules and the agreements between the parties. On Stripe, the ACH dispute window is up to 60 calendar days for a personal account and up to two business days for a business account.
General information, not legal advice.
- CFPB: Regulation E, 12 CFR 1005.2, Definitions
- CFPB: Regulation E, 12 CFR 1005.3, Coverage
- CFPB: Regulation E, 12 CFR 1005.10, Preauthorized transfers
- CFPB: Regulation E, 12 CFR 1005.11, Procedures for resolving errors
- Nacha: What is ACH
- Stripe: ACH Direct Debit
Every figure on this page was checked against these sources on Oct 6, 2026. General information, not legal or tax advice.