Learn about the differences between MFT and SFTP, and find out which file transfer protocol is best for your organization.

Written by Editorial Staff. Last Updated:

Managed File Transfer (MFT) and Secure File Transfer Protocol (SFTP) are both related to the secure transfer of files.They differ in their usage, with managed file transfer platforms offering additional functionality and enabling scalability as an organization’s requirements grow and evolve.

What is MFT? 

MFT stands for Managed File Transfer, and is a platform that supports secure, reliable, and auditable file sharing in multiple protocols between a number of endpoints. MFT enables teams to move large volumes of unstructured data while offering advanced capabilities like data gateways, guaranteed delivery, automation, non-repudiation, end-to-end security, comprehensive reporting, and more. 

Managed File Transfer protocol is an essential solution for securely transferring a high-volume of sensitive data between systems, particularly across different geographic locations or between business partners, vendors and internal users.

Key features of MFT include: 

  1. Security 
  2. Reliability 
  3. Auditing & Compliance 
  4. Automation

MFT solutions use security mechanisms like proxy servers, encryption, and multi-factor authentication to protect sensitive data during transit, and are designed to ensure files are transferred reliably, even in the face of network or system failures.

When it comes to auditing and compliance, MFT solutions offer detailed auditing and reporting capabilities that help organizations meet compliance requirements for PCI DSS, SOX and HIPAA. To reduce manual error and save time conducting business processes, MFT tools can be configured to automate file transfer processes. 

What is SFTP? 

Secure File Transfer Protocol (SFTP) is a network protocol used for secure data exchange over a network, typically the Internet. SFTP is an extension of the Secure Shell (SSH) protocol and provides an encrypted channel for data transfer between a SFTP server and client. It also integrates with firewalls and VPNs.

Secure FTP provides a number of security features that make it more secure than traditional File Transfer Protocol (FTP), which transfers files in clear text and can be intercepted by attackers. SFTP encrypts both the commands and data sent between the client and server, ensuring sensitive data is protected during transfer.

SFTP provides authentication mechanisms that ensure only authorized users access and transfer files. SFTP supports a range of user access authentication methods, including username/password combinations, User IDs, public key authentication, and integrates with directory services like LDAP.

SFTP is commonly used for file transfer processes between business and trading partners, transferring data to backup servers and automating file transfer activity through workflows and batch processes. 

MFT vs SFTP: Understanding the Differences 

Managed File Transfer is a comprehensive platform that supports a variety of protocols for secure data exchange and Secure File Transfer Protocol is one of the protocols typically supported by an MFT platform. There are several key differences between the two methods: 

  • Functionality 
  • Complexity 
  • Security 
  • Integration 
  • Scalability


SFTP is a file transfer protocol that is used for secure data exchange, while MFT is a technology platform that offers more features, like workflow automation, scheduling, auditing, and monitoring. 


While SFTP is a singular protocol, MFT solutions are more complex to learn and manage because the platform includes a wide range of features and requires additional configuration. 


Both MFT and SFTP provide secure options for file transfer activity. While SFTP provides encryption for data in transit, it doesn’t offer the additional security features found in MFT solutions, like end-user authentication, user access controls, and audit trails. 


SFTP is a protocol that can be integrated with other systems and workflows, but it lacks the level of integration capabilities found in MFT solutions. MFT platforms are designed to integrate with a range of enterprise systems and end-to-end workflows, making it easy to automate file transfers and incorporate into business processes. 


MFT solutions are designed to handle transfers of large files between multiple systems and end-users, whereas SFTP can be limited in scalability and performance.

How does Managed File Transfer work? 

Managed File Transfer (MFT) solutions typically work by providing a secure, centralized platform for managing and monitoring file transfers between systems. 

At a high-level overview, MFT transfers work by following a step-by-step workflow:

  1. Configuration: An MFT administrator sets up the MFT solution and configures policies and settings.
  2. Authentication: The MFT solution authenticates the user or system initiating the transfer, ensuring they have the necessary user access permissions to perform the transfer.
  3. Encryption: The MFT solution encrypts the files being transferred, ensuring protection during transit.
  4. Transfer: Files are transferred between systems using secure transfer protocols like SFTP or FTPS. The MFT solution monitors the transfer in real-time and will automatically retry failed transfers.
  5. Receipt: The receiving system confirms receipt of the files, and the MFT solution logs the transaction.
  6. Reporting: The MFT solution generates reports on file transfer activities, providing administrators with insights into transfer volume, transfer success rates, and potential security threats.

Benefits of Managed File Transfer Solutions

MFT solutions provide enhanced security, reliability, and speed for file transfer activity, allowing organizations to focus on core business needs and initiatives, rather than worrying about data exchange. Managed file transfer solutions offer several benefits: 

  • Multiple levels of security 
  • Features ensure files are received and transferred without error
  • Centralized platform for managing and monitoring all file transfers
  • Comprehensive auditing helps meet compliance requirements 
  • Eliminate costs associated with manual file transfer
  • Automation helps streamline processes and reduce manual labor

MFT solutions provide multiple layers of security including encryption, proxy servers, secure file transfer protocols, and authentication for end-users, ensuring data is securely transmitted between systems. Monitoring and audit trail capabilities allow organizations to track all file transfers and ensure that data is not compromised. 

Features like resume capability, retry options, and transfer validation increase reliability by ensuring files are received at their destination without encountering errors, and by providing a centralized MFT platform for managing and monitoring data exchange teams can simplify FTP management and reduce the need for manual intervention. 

When it comes to compliance requirements, MFT solutions can be extremely valuable. Through comprehensive audit trails of all file transfers, organizations can more easily meet compliance standards like HIPAA for healthcare companies, PCI DSS, SOX, and GDPR. 

By eliminating the tasks and related costs associated with manual file transfer, managed file transfer solutions help companies save money and time, and by consistently adhering to compliance standards, companies can avoid penalties from failed or non-compliant file transfer activities. 

Managed File Transfer Use Cases 

MFT is used in a variety of industries where secure, reliable file transfer is essential and compliance requirements are top-of-mind:

  • Healthcare
  • Banking and Finance
  • Insurance
  • Retail 
  • Government 
  • Manufacturing

MFT solutions are used widely in the healthcare industry to transfer sensitive patient data between hospitals, clinics, and other healthcare providers, and help ensure compliance with regulations such as HIPAA.

MFT is used often in banking and finance to transfer financial data between banks, payment processors, and other financial institutions, with MFT solutions ensuring adherence to compliance regulations like PCI DSS and SOX, which require the secure transmission of financial data.

In the retail industry, managed file transfer solutions are used to transfer data between suppliers, manufacturers, and retailers and enable secure and timely delivery of product information, inventory data, and other critical metrics.

Managed file transfer is used by government agencies to transfer sensitive data like tax information, legal documents, and other confidential materials and ensure governments stay in compliance with regulations like FISMA and NIST.

In manufacturing, MFT solutions help data exchange between supplies, vendors, manufacturers, and distributors, and make it easier to deliver product information and engineering data quickly and reliably.  

ActiveBatch MFT Solution 

Achieve secure data exchange and file sharing with enterprise workload automation with the ActiveBatch Managed File Transfer solution

Many IT teams use batch scripts or file transfer management tools for file transfer automation, requiring teams to manage operations and file transfer software from separate internal systems, making daily business processes more complex.  ActiveBatch Workload Automation provides the ability to automate and control MFT operations without involving a separate Managed File Transfer solution. 

MFT Automation 

When it comes to critical IT initiatives and business processes, reliable, secure, and real-time data exchange is paramount. The ActiveBatch MFT solution brings together the benefits of a powerful, enterprise workload automation tool with the security, reliability, and performance of trusted file transfer protocol tools.

Frequently Asked Questions

What is FTP?

File Transfer Protocol (FTP) is a standard network protocol used for transferring files between systems over a TCP/IP network. It is one of the oldest protocols used for file transfer and is still widely used today.

FTP uses a client-server model, where one system acts as the FTP server and another system acts as the client. The client sends requests to the server to upload or download files, and the server responds to those requests.

FTP supports two modes of data exchange: ASCII mode and Binary mode. ASCII mode is used for transferring text files, while Binary mode is used for transferring binary files like images, audio, or video.

FTP is known for its simplicity and ease of use, but it has some security limitations. FTP transmits usernames and passwords in plain text, making it vulnerable to attacks. Additionally, FTP protocols do not provide encryption or security mechanisms, making it unsuitable for transferring sensitive data over unsecured networks. As a result, many organizations have started using more secure methods like MFT platforms and SFTP solutions, and FTPS, which is FTP over SSL or TLS. 

See how ActiveBatch’s managed file transfer automation software enables more secure data exchange than FTP.

What is better than SFTP?

SFTP (Secure File Transfer Protocol) is a widely used protocol for secure file transfer, but there are newer and more advanced protocols available that offer improved security and functionality. 
Some more secure and feature-heavy alternatives to SFTP include:

• FTPS: FTPS is an extension of FTP that uses SSL or TLS encryption to secure file transfers. It provides the same functionality as FTP, but with the added security of encryption.
• AS2: AS2 (Applicability Statement 2) is a protocol used for secure, reliable B2B file transfer. It provides encryption, digital signatures, and message integrity checks.
• HTTPS: HTTPS (Hypertext Transfer Protocol Secure) is a protocol that uses SSL or TLS encryption to secure web traffic, including file transfers. It provides the same functionality as HTTP, but with encryption.
• WebDAV: WebDAV (Web Distributed Authoring and Versioning) is a protocol that extends HTTP to support file management operations including file upload, download, and deletion, and it provides encryption and authentication mechanisms.

See why managed file transfer with ActiveBatch is better than SFTP by building reliable, low-code workflows.