EFT Vs. EBT for Fund Transfers

EFT Vs. EBT for Fund Transfers
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Electronic funds transfers and Electronic benefits transfers constitute two ways in which states distribute aid to individuals enrolled in public assistance plans. Colloquially referred to as EFT and EBT, respectively, these programs both involve the transfer of money from the state to a benefits recipient, though they differ significantly in a number of ways. Those looking into benefits programs should have a full understanding of these differences before making a decision regarding the use of either.

Differences in Distribution

Electronic benefits transfers provide money to benefits recipients in a different manner than do electronic funds transfers. Benefit recipients must have bank accounts to receive EFTs as a form of benefits, as it constitutes a transfer of funds from a state fund to an individual bank account. Those receiving EBTs gain access to a state-maintained account into which the state deposits funds on a regular basis. Thus one does not need access to a bank account to receive EBT benefits.

Difference in Potential Benefits

EBTs and EFTs provide different potential benefits to recipients. A report prepared by professors at the University of North Carolina Chapel Hill points out that an EFT may connect benefits recipients to success in the financial mainstream by helping individuals establish a sound banking record. This allows recipients to build credit, save money, gain interest and potentially access loans and mortgages. An EFT also allows benefits recipients to spend money as they see fit, while EBT benefits can only be spent on necessary food items. However, not all Americans have access to the banking systems. For these individuals, an EBT provides a more realistic option for benefits.


Not all states offer benefits via EFT or EBT. As of 2003, those few states that offered benefits via EFT were concentrated in the Northeast and Midwest. Florida and Connecticut operate prominent EFT programs for benefits recipients. EBT programs exist in 22 states, ranging geographically from Hawaii to Vermont, Texas and California. Each state maintains a thorough website stating all benefits available to recipients of the program. EBT programs fall under the administration of the Supplemental Nutrition Assistance Programs, known as SNAP and formerly called food stamps.

General Differences

Technically, an electronic benefits transfer is an electronic funds transfer. Moving money from one account to another via electronic channels constitutes an electronic funds transfer. Thus states and the federal government use the acronym EFT in a number of contexts, from describing methods of making electronic child support payments to depositing student loan money into an account. EBT, on the other hand, refers exclusively to the transfer of benefits to an individual via a state-run welfare program.