In order to understand which debit order solution to employ you are going to first need to have an understanding of the distinctions inside the three main collection approaches: Authenticated Early Debit Order (AEDO), Non-authenticated Early Debit Order (NAEDO) and Electronic Funds Transfer (EFT).
EFT Service
We begin with the first and the most regularly used method, EFT. The EFT service is provided by several contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which enables businesses to process payments completely by computerised means. The service can be utilized for both obtaining payments from clientele (EFT debits) and for making payments (EFT credits). Payments can be made for wages, creditors, paychecks etc. Your enterprise may lodge payments and collections by way of their bank to all participating banks.
Transacting through the EFT service
Either debit and credits may be processed from the system.
The next few conditions is applicable:
- Credits can be processed from current, savings and transmission bank accounts, and in certain situations, bonds, loans and subscription share accounts. Transactions higher or equivalent to R5 million rand are not permitted and will be homed back using the reason it exceeds industry enforced limits. These kinds of transactions ought to be re-routed via the realtime line and not the operator.
- Debits may be processed from cheque, certain savings and transmission accounts. Debits to bond and subscription share accounts aren't permitted. A greatest value limit of R500,000 per transaction was in place. - The breaking up or splitting of transactions to avoid limit constraints aren't allowed.
Coverage of the EFT service
The EFT service handles all kinds of accounts permitted by the EFT service rules and which are kept in the Common Monetary Area by participating banks. A listing of collaborating banks can be obtained on application.
NAEDO Service
The NAEDO service is supplied by collaborating banking institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which permits businesses and other bodies to process payments entirely by computerised method. The service can be used for acquiring repayments from clients (debits). NAEDO is unable to make provision to get a credit facility and EFT credit will probably be implemented if required.
NAEDO payment instructions support multiple presentments thereof. If these are unpaid after the first presentment, credit monitoring can be invoked. Credit tracking is optionally available and when chosen, the unpaid NAEDO payment instruction will be represented throughout the afternoon of the same business day and for the successive number of days chosen, twice daily, on working days until payment is received or till expiration of the tracking interval selected.
All of the NAEDO repayment instructions, will be randomised supplying all users an equal opportunity of getting money and therefore are processed as close as is possible after income credits are paid to the banking accounts of Customers early in the day.
Transacting via the NAEDO service
Only debits can be processed with the system. The following conditions will apply:
- Debits may be processed from cheque, certain savings and transmission accounts. Debits to bond and subscription share accounts are not permitted. - A highest value limit of R5 000 per transaction is in place. The splitting of transactions to prevent the limit constraints is not permitted. - All NAEDO payment instructions should be distinctively identifiable by way of the Agreement Reference as well as settlement period.
Coverage associated with the NAEDO service
The NAEDO service features a variety of bank accounts permitted by the NAEDO Service guidelines and which are kept in the Common Monetary Area by participating banking institutions. A listing of partnering banking institutions can be obtained on application.
AEDO Service
The AEDO services are much like NAEDO in all respects, but cannot be easily questioned as the transaction is started using the account holders credit card and pin. AEDO is an effective strategy to minimize collection risk and defaults on payment.
Bottom line
Examples of where EFT and NAEDO services can be used is offered inside my previous post. The AEDO service may efficiently be utilized for collection in a circumstance whenever NAEDO might have been used.
EFT Service
We begin with the first and the most regularly used method, EFT. The EFT service is provided by several contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which enables businesses to process payments completely by computerised means. The service can be utilized for both obtaining payments from clientele (EFT debits) and for making payments (EFT credits). Payments can be made for wages, creditors, paychecks etc. Your enterprise may lodge payments and collections by way of their bank to all participating banks.
Transacting through the EFT service
Either debit and credits may be processed from the system.
The next few conditions is applicable:
- Credits can be processed from current, savings and transmission bank accounts, and in certain situations, bonds, loans and subscription share accounts. Transactions higher or equivalent to R5 million rand are not permitted and will be homed back using the reason it exceeds industry enforced limits. These kinds of transactions ought to be re-routed via the realtime line and not the operator.
- Debits may be processed from cheque, certain savings and transmission accounts. Debits to bond and subscription share accounts aren't permitted. A greatest value limit of R500,000 per transaction was in place. - The breaking up or splitting of transactions to avoid limit constraints aren't allowed.
Coverage of the EFT service
The EFT service handles all kinds of accounts permitted by the EFT service rules and which are kept in the Common Monetary Area by participating banks. A listing of collaborating banks can be obtained on application.
NAEDO Service
The NAEDO service is supplied by collaborating banking institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which permits businesses and other bodies to process payments entirely by computerised method. The service can be used for acquiring repayments from clients (debits). NAEDO is unable to make provision to get a credit facility and EFT credit will probably be implemented if required.
NAEDO payment instructions support multiple presentments thereof. If these are unpaid after the first presentment, credit monitoring can be invoked. Credit tracking is optionally available and when chosen, the unpaid NAEDO payment instruction will be represented throughout the afternoon of the same business day and for the successive number of days chosen, twice daily, on working days until payment is received or till expiration of the tracking interval selected.
All of the NAEDO repayment instructions, will be randomised supplying all users an equal opportunity of getting money and therefore are processed as close as is possible after income credits are paid to the banking accounts of Customers early in the day.
Transacting via the NAEDO service
Only debits can be processed with the system. The following conditions will apply:
- Debits may be processed from cheque, certain savings and transmission accounts. Debits to bond and subscription share accounts are not permitted. - A highest value limit of R5 000 per transaction is in place. The splitting of transactions to prevent the limit constraints is not permitted. - All NAEDO payment instructions should be distinctively identifiable by way of the Agreement Reference as well as settlement period.
Coverage associated with the NAEDO service
The NAEDO service features a variety of bank accounts permitted by the NAEDO Service guidelines and which are kept in the Common Monetary Area by participating banking institutions. A listing of partnering banking institutions can be obtained on application.
AEDO Service
The AEDO services are much like NAEDO in all respects, but cannot be easily questioned as the transaction is started using the account holders credit card and pin. AEDO is an effective strategy to minimize collection risk and defaults on payment.
Bottom line
Examples of where EFT and NAEDO services can be used is offered inside my previous post. The AEDO service may efficiently be utilized for collection in a circumstance whenever NAEDO might have been used.
About the Author:
Make use of debit orders to collect payment from debtors and improve your business cash flow today. Steven is an expert in NAEDO systems.
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