In order to recognize which debit order option to utilise you'll initially need to have an awareness of the differences in the three important collection solutions: Authenticated Early Debit Order (AEDO), Non-authenticated Early Debit Order (NAEDO) and Electronic Funds Transfer (EFT).
EFT Debits
Starting with the first and most commonly used method, EFT. The EFT services are available from many participating banks (eg. ABSA, FNB, Nedbank and Standard Bank), which in turn makes it possible for businesses to process payments totally by computerised methods. The service can be utilised for both acquiring payments from customers (EFT debits) and also for paying (EFT credits). Payments can be made for wages, creditors, paychecks etc. Your company may lodge payments and collections by means of their bank to all contributing banks.
Transacting using the EFT service
Either debit and credits can be processed with the system.
The following criteria is applicable:
- Credits can be processed towards current, savings and transmission accounts, and within certain circumstances, bonds, loans and subscription share bank accounts. Transactions higher or equivalent to R5 million rand are not allowed and will be homed back using the reason that it exceeds market imposed restrictions. Such transactions ought to be routed over the real-time lines and not the operator.
- Debits are processed from cheque, certain savings and transmission accounts. Debits to bond and monthly subscription share accounts aren't allowed. A max value limit of R500,000 per transaction was in place. - The breaking up or dividing of transactions to not have limit restrictions are not allowed.
Scope of the EFT service
The EFT service covers all kinds of accounts allowed by the EFT service rules and which are kept in the Common Monetary Area by participating banks. A directory of partnering banks can be acquired on application.
NAEDO Service
The NAEDO service is provided by partnering financial institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which enables enterprises as well as other bodies to collect payments fully by computerised methods. The service can be used for obtaining repayments from consumers (debits). NAEDO doesn't make provision to get a credit facility and EFT credit will probably be used if need be.
NAEDO repayment instructions aid multiple presentments thereof. If they are unpaid following the first presentment, credit tracking may be invoked. Credit monitoring is optionally available and when chosen, the past due NAEDO payment instruction may automatically be represented during the mid-day of the same day and for the successive number of days chosen, twice daily, on business days till payment is attained or till expiry of the tracking interval selected.
All NAEDO repayment instructions, will be randomised providing all users an equal chance of getting money and are processed as close as possible after wage credits are payed in to the bank accounts of Customers early in the morning.
Transacting via the NAEDO service
Merely debits can be processed with the system. The below conditions will apply:
- Debits are effected from current, certain savings and transmission accounts. Debits to bond and subscription share accounts aren't allowed. - A maximum value ceiling of R5 000 per transaction is in place. The splitting of transactions to prevent the limit restrictions is not allowed. - All NAEDO payment instructions ought to be distinctively discernable by the Agreement Reference and also the repayment cycle.
Coverage associated with the NAEDO service
The NAEDO service covers a variety of bank accounts permitted by way of the NAEDO Service guidelines and which are kept in the Common Monetary Area by participating banks. A directory of partnering financial institutions is accessible on application.
AEDO Service
The AEDO services are just like NAEDO in all respects, but can not be very easily challenged as the transaction is initiated with the customers credit card and pin. AEDO is an excellent strategy to reduce collection risk and failures on payment.
Bottom line
Examples of where EFT and NAEDO services can be employed is offered inside my previous article. The AEDO service may successfully be used for collection in almost any circumstance whenever NAEDO may have been made use of.
EFT Debits
Starting with the first and most commonly used method, EFT. The EFT services are available from many participating banks (eg. ABSA, FNB, Nedbank and Standard Bank), which in turn makes it possible for businesses to process payments totally by computerised methods. The service can be utilised for both acquiring payments from customers (EFT debits) and also for paying (EFT credits). Payments can be made for wages, creditors, paychecks etc. Your company may lodge payments and collections by means of their bank to all contributing banks.
Transacting using the EFT service
Either debit and credits can be processed with the system.
The following criteria is applicable:
- Credits can be processed towards current, savings and transmission accounts, and within certain circumstances, bonds, loans and subscription share bank accounts. Transactions higher or equivalent to R5 million rand are not allowed and will be homed back using the reason that it exceeds market imposed restrictions. Such transactions ought to be routed over the real-time lines and not the operator.
- Debits are processed from cheque, certain savings and transmission accounts. Debits to bond and monthly subscription share accounts aren't allowed. A max value limit of R500,000 per transaction was in place. - The breaking up or dividing of transactions to not have limit restrictions are not allowed.
Scope of the EFT service
The EFT service covers all kinds of accounts allowed by the EFT service rules and which are kept in the Common Monetary Area by participating banks. A directory of partnering banks can be acquired on application.
NAEDO Service
The NAEDO service is provided by partnering financial institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which enables enterprises as well as other bodies to collect payments fully by computerised methods. The service can be used for obtaining repayments from consumers (debits). NAEDO doesn't make provision to get a credit facility and EFT credit will probably be used if need be.
NAEDO repayment instructions aid multiple presentments thereof. If they are unpaid following the first presentment, credit tracking may be invoked. Credit monitoring is optionally available and when chosen, the past due NAEDO payment instruction may automatically be represented during the mid-day of the same day and for the successive number of days chosen, twice daily, on business days till payment is attained or till expiry of the tracking interval selected.
All NAEDO repayment instructions, will be randomised providing all users an equal chance of getting money and are processed as close as possible after wage credits are payed in to the bank accounts of Customers early in the morning.
Transacting via the NAEDO service
Merely debits can be processed with the system. The below conditions will apply:
- Debits are effected from current, certain savings and transmission accounts. Debits to bond and subscription share accounts aren't allowed. - A maximum value ceiling of R5 000 per transaction is in place. The splitting of transactions to prevent the limit restrictions is not allowed. - All NAEDO payment instructions ought to be distinctively discernable by the Agreement Reference and also the repayment cycle.
Coverage associated with the NAEDO service
The NAEDO service covers a variety of bank accounts permitted by way of the NAEDO Service guidelines and which are kept in the Common Monetary Area by participating banks. A directory of partnering financial institutions is accessible on application.
AEDO Service
The AEDO services are just like NAEDO in all respects, but can not be very easily challenged as the transaction is initiated with the customers credit card and pin. AEDO is an excellent strategy to reduce collection risk and failures on payment.
Bottom line
Examples of where EFT and NAEDO services can be employed is offered inside my previous article. The AEDO service may successfully be used for collection in almost any circumstance whenever NAEDO may have been made use of.
About the Author:
Utilise a debit order service to collect payment from debtors and improve your business cash flow today. Steven is an expert in EFT debit collections.
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