EFT payments in Canada

An EFT lets your Canadian business pay and collect through bank accounts. Credits go out, pre-authorized debits come in, and the banks move the money on the date you set.

Updated November 4, 2026

What EFT Rails does

EFT Rails sends electronic funds transfer (EFT) credits and collects pre-authorized debits (PADs) through Canadian bank accounts for businesses and lenders, by API or in the dashboard. Each payment shows its state, the date it is expected to settle and the reference printed on your bank statement. You can set the banking day the money is to land. If you do not set one, EFT Rails uses the earliest banking day. The API reference documents the payment resource. You hold the PAD agreement with your customer and send the notices it calls for. A returned payment shows as returned in the API and dashboard.

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EFT payments in Canada in brief

Credits and debits

Payroll, supplier payments, refunds and loan disbursements go out as credits. Rent, loan payments, premiums, memberships and invoices come in as PADs, which you issue under your customer's recorded and revocable authorization.

When the money moves

You set the Due Date. A credit that arrives the business day before that date is available by the opening of business on the Due Date, and the banks settle on the following business day.

Collecting needs an agreement

Personal and business PADs need a PAD agreement with your customer. Your customer can claim reimbursement through their bank for up to 90 calendar days after a personal PAD or 10 business days after a business PAD.

When a payment comes back

A bank can reject an item before posting or return it afterward with a reason code. A debit returned for insufficient or uncleared funds can be re-presented once within 30 calendar days, for the same amount.

What an EFT is

An EFT lets you pay or collect through a Canadian bank account without a cheque or a card. You send credits to suppliers, employees and other recipients, and collect debits from customers. The banks exchange your payment in an automated funds transfer (AFT) file, a batch file for clearing and settlement through the Automated Clearing Settlement System (ACSS).¹ Its Due Date is the day you want a credit deposited to your recipient or a debit taken from your customer.² A PAD is a debit you issue on your customer's account at their bank under a PAD agreement, their recorded authorization, which they can revoke.³

Three systems clear payments in Canada. The ACSS handles everyday batch payments, including EFT. Payments Canada's Lynx carries high-value payments, settled one at a time and final once settled.⁴ The Real-Time Rail is Payments Canada's real-time exchange, clearing and settlement system, and its settlement instructions are irrevocable once generated or submitted.⁵ ACH is the American counterpart to the AFT stream, with separate file formats, participants and rules, so a file or integration built for one does not run on the other.

Read about AFT credits and debits, EFT and wire transfers, the Real-Time Rail and EFT and Interac e-Transfer.

The guides

These guides take you from sending a payment to reading its file.

When the money moves

Your bank's cutoff and the destination branch's posting time decide when your payment moves. Banks exchange AFT files three times each business day, at 09:30, 16:30 and 21:00 Eastern Time. A file sent after 21:00 goes in the next business day's first exchange.⁶

Your bank sets its cutoff earlier so your file reaches the receiving bank before the banks' deadline.⁷

For a credit, the destination branch's lead time sets when you must send and when your recipient can withdraw the money. Banks decide which of their branches credit the same day.⁸

Destination branch	When the file must be exchanged	When the money is available
Credits the same day	The business day before the Due Date, or on the Due Date.⁸	Within 2 hours of the exchange deadline by which the bank received it. If it arrived the business day before the Due Date, by the opening of business on the Due Date.⁹
Needs one or two business days	One or two business days before the Due Date, matching the branch's lead time.⁸	By the opening of business on the Due Date.⁹

A debit reaches your customer's bank on its Due Date or later.¹⁰ The banks settle on the business day after the Due Date, or after the exchange for an item delivered late. Your recipient can have the money before that settlement.¹¹ A transaction dated on a day that is not a business day is treated as dated the next business day.¹²

Read about cutoff times, same-day EFT, payment timing and reconciliation.

Debits need an agreement

Before you collect from a customer's account, you need their authorization and they need to know what you will debit. The PAD agreement must contain the mandatory terms, say whether the debits recur at set intervals, happen once or occur sporadically, and say whether their amounts are fixed or variable.¹³

Send your customer the agreement's terms at least 10 calendar days before the first debit, unless they agree to a shorter period or waive it.¹⁴ For debits on a schedule, tell them at least 10 calendar days before a change to the amount or date, and before each variable amount after the first.¹⁵

Your customer can ask their bank for the money back if a debit did not follow the agreement, within 90 calendar days for a personal PAD or 10 business days for a business PAD.¹⁶

Read about pre-authorized debits and the PAD agreement.

What comes back

A problem can stop a whole file, one payment before posting or one payment after posting.

What comes back	When	What you do
A rejected file	Within 1 hour after the first or second exchange deadline, or before the next day's first deadline for the third exchange.¹⁷	Correct the file and resend it in the same exchange or a later one.
A rejected payment	By the business day after the file was checked.¹⁸	Correct the payment data and send it again.
A returned payment	A payment that could not be posted or was refused comes back no later than the business day after it reaches the part of the bank that can refuse it, with a three-digit reason code.¹⁹²⁰	Match the return to its payment and address the reason with your customer or recipient.

You may re-present a debit returned for "Non-Sufficient Funds" or "Funds Not Cleared" once within 30 calendar days, for the same amount with nothing added, and a second dishonour ends re-presentment.²¹

Read about returns and reconciliation, rejects and returns, return codes and handling NSF returns.

Limits

The amount on a credit or debit is a 10-digit dollar figure and must be greater than zero.²² Your bank or payment service provider sets your limits per item, per file and per day in your account agreement.

Read about EFT payment limits and EFT and Interac e-Transfer.

Who may move the money

You can send through your own bank or through a payment service provider that sends under its own bank relationship. The Retail Payment Activities Act (RPAA) requires a payment service provider to register with the Bank of Canada before performing any retail payment activity.²³ Remitting or transmitting funds between people or entities over an electronic funds transfer network is a money services business service, and the business must register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) before beginning to operate in Canada.²⁴

The file format

The format is CPA-005, a fixed-length file with an opening and a closing record.²⁵ Each file carries a File Creation Number that goes up by one, so the receiving bank can spot a missing or repeated file.²⁶

Read about the CPA-005 file format and the File Creation Number.

Sources (26)

Rule F1, "Introduction"; Rule F1, Definitions, "AFT Transaction" ↩
Rule F1, Definitions, "Due Date" ↩
Rule H1, sections 5(m) and 5(o) ↩
Bank of Canada, "A brief overview of Lynx" ↩
By-law No. 10, sections 1 and 33 ↩
Rule F1, Part II, "Exchange Deadlines and Periods" ↩
Rule F1, Part II, "AFT File Receipt"; Rule F1, Part II, "Transmission Requirements" ↩
Rule F1, Part II, "Credit Transaction Lead Times and Exchange"; Rule F1, Part II, "Serviceability Code Assignment" ↩
Rule F1, Part II, "Credit Transaction Funds Availability" ↩
Rule F1, Part II, "Debit Transaction Exchange Dates" ↩
Rule F1, Part V, "Settlement" ↩
Standard 005, Section D, paragraph 5 ↩
Rule H1, section 15 ↩
Rule H1, section 16 ↩
Rule H1, section 17 ↩
Rule H1, section 24 ↩
Rule F1, Part II, "AFT Initial File Edit and Rejected Files" ↩
Rule F1, Part II, "Transaction Edit, Account Validation and Rejected Transactions" ↩
Rule F1, Part III, "Unposted/Dishonoured Transactions/Transactions Refused by Payor/Payee"; Rule F1, Part III, "Time Limitation for Return" ↩
Standard 007, sections 5 and 6; Standard 007, Appendix I, "List of Return Reason Codes" ↩
Rule F1, Part III, "Re-presentment and Rejected Returned Transactions" ↩
Standard 005, Section D, Type C, element 05; Standard 005, Section D, Appendix 1, "Amount" ↩
RPAA, section 23 ↩
FINTRAC, "Remitting or transmitting funds"; FINTRAC, "Register with FINTRAC" ↩
Standard 005, Section B ↩
Standard 005, Section D, Appendix 1, "File Creation Number"; Rule F1, Part IV, "Retention of File Creation Numbers" ↩

Questions

What is an EFT payment in Canada?

An EFT payment is an item exchanged between Canadian financial institutions in an AFT file for clearing and settlement.¹ You set its Due Date, when a credit goes to your recipient's account or a debit comes from your customer's account.²

Is EFT the same as ACH?

No. ACH is the American counterpart to the AFT stream. Its file formats, participants and rules are separate, so a file or integration built for one does not run on the other.

How long does an EFT take?

At a branch that credits the same day, the money is available within 2 hours of the exchange deadline by which the bank received it. At a branch needing one or two Business Days, it is available by the opening of business on the Due Date.³ The banks settle on the following Business Day.⁴ See how long an EFT takes.

Can an EFT be same day?

Yes. At a branch that credits the same day, you can exchange the file on the Due Date.⁵ The money is available within 2 hours of the exchange deadline by which the bank received it.³ Read about same-day EFT.

Can I pull money from a customer's account by EFT?

Yes, with a PAD, which your customer authorizes in a PAD agreement and can cancel.⁶ The PAD agreement must contain the mandatory terms and set out its timing and amounts.⁷ Send the confirmation at least 10 calendar days before the first debit unless your customer authorizes a shorter period or waives it.⁸ Read about pre-authorized debits.

What happens when an EFT fails?

A payment that fails the bank's transaction edit is rejected and returned by the Business Day after the original file was edited.⁹ A payment that passed the edit but could not be posted, was dishonoured or was refused comes back with a Return Reason Code.¹⁰ You can re-present an insufficient-funds or uncleared-funds debit once within 30 calendar days for the same amount.¹¹ Read about EFT returns and reconciliation.

Sources (11)

Rule F1, "Introduction"; Rule F1, Definitions, "AFT Transaction" ↩
Rule F1, Definitions, "Due Date" ↩
Rule F1, Part II, "Credit Transaction Funds Availability" ↩
Rule F1, Part V, "Settlement" ↩
Rule F1, Part II, "Credit Transaction Lead Times and Exchange"; Rule F1, Part II, "Serviceability Code Assignment" ↩
Rule H1, sections 5(m) and 5(o) ↩
Rule H1, section 15 ↩
Rule H1, section 16 ↩
Rule F1, Part II, "Transaction Edit, Account Validation and Rejected Transactions" ↩
Rule F1, Part III, "Unposted/Dishonoured Transactions/Transactions Refused by Payor/Payee"; Rule F1, Part III, "Time Limitation for Return" ↩
Rule F1, Part III, "Re-presentment and Rejected Returned Transactions" ↩