So that you can understand which debit order solution to use you may first need to have an understanding of the distinctions in the three major collection approaches: Authenticated Early Debit Order (AEDO), Non-authenticated Early Debit Order (NAEDO) and Electronic Funds Transfer (EFT).
EFT Debits
Lets start with the first and most commonly used method, EFT. The EFT services are available from several participating banks (eg. ABSA, FNB, Nedbank and Standard Bank), that permits businesses to process payments completely by computerised methods. The service can be utilized both for recovering payments from clientele (EFT debits) and for making payments (EFT credits). Payments can be done for wages, creditors, paychecks etc. Your company can lodge payments and collections through their bank to all collaborating banks.
Transacting with the EFT service
Both debit and credits may be processed from the system.
The subsequent requirements applies:
- Credits can be effected from current, savings and transmission accounts, and within specific situations, bonds, loans and subscription share bank accounts. Transactions larger or equivalent to R5 million rand will not be permitted and will be homed back with the reason it exceeds sector enforced limits. Such transactions should be sent over the realtime line but not the operator.
- Debits are effected from current, certain savings and transmission accounts. Debits to bond and subscription share accounts aren't allowed. A highest value ceiling of R500,000 per transaction was in place. - The breaking up or splitting of transactions to prevent limit constraints will not be permitted.
Coverage of the EFT service
The EFT service handles all sorts of accounts permitted by the EFT service rules and which are held in the Common Monetary Area by partnering banking institutions. A directory of participating banks can be acquired on request.
NAEDO Service
The NAEDO service is supplied by partnering banking institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which allows businesses as well as other bodies to collect payments entirely by computerised means. The service can be used for recovering repayments from clientele (debits). NAEDO is unable to make provision for any credit facility and EFT credit will likely be employed if needed.
NAEDO payment instructions aid numerous presentments thereof. If they're unpaid after the first presentment, credit tracking may be invoked. Credit tracking is optionally available and when picked, the past due NAEDO repayment instruction may be represented during the afternoon of the same working day and for the consecutive number of days selected, twice a day, on working days until eventually payment is attained or till expiry of the tracking period chosen.
All of the NAEDO repayment instructions, are randomised offering all users an equal possibility of obtaining payment and therefore are processed as close as possible after salary credits are paid to the bank accounts of clients early in the morning.
Transacting by way of the NAEDO service
Only debits may be processed with the system. The below criteria will apply:
- Debits may be processed from cheque, certain savings and transmission bank accounts. Debits to bond and subscription share accounts are not allowed. - A max value limit of R5 000 per transaction is in place. The breaking up of transactions to prevent the limit constraints isn't allowed. - All NAEDO payment instructions has to be distinctively discernable through the Agreement Reference and also the settlement cycle.
Scope of the NAEDO service
The NAEDO service includes a variety of accounts allowed through the NAEDO Service regulations and which are held in the Common Monetary Area by partnering financial institutions. A directory of partnering banking institutions is accessible on application.
AEDO Service
The AEDO services are similar to NAEDO in all respects, but can't be very easily disputed as the transaction is started using the account holders card and pin. AEDO is an excellent approach to mitigate collection risk and failures on payment.
Summary
Examples of where EFT and NAEDO services can be utilised is given within my previous post. The AEDO service may effectively be utilized for collection in a circumstance whenever NAEDO could have been utilized.
EFT Debits
Lets start with the first and most commonly used method, EFT. The EFT services are available from several participating banks (eg. ABSA, FNB, Nedbank and Standard Bank), that permits businesses to process payments completely by computerised methods. The service can be utilized both for recovering payments from clientele (EFT debits) and for making payments (EFT credits). Payments can be done for wages, creditors, paychecks etc. Your company can lodge payments and collections through their bank to all collaborating banks.
Transacting with the EFT service
Both debit and credits may be processed from the system.
The subsequent requirements applies:
- Credits can be effected from current, savings and transmission accounts, and within specific situations, bonds, loans and subscription share bank accounts. Transactions larger or equivalent to R5 million rand will not be permitted and will be homed back with the reason it exceeds sector enforced limits. Such transactions should be sent over the realtime line but not the operator.
- Debits are effected from current, certain savings and transmission accounts. Debits to bond and subscription share accounts aren't allowed. A highest value ceiling of R500,000 per transaction was in place. - The breaking up or splitting of transactions to prevent limit constraints will not be permitted.
Coverage of the EFT service
The EFT service handles all sorts of accounts permitted by the EFT service rules and which are held in the Common Monetary Area by partnering banking institutions. A directory of participating banks can be acquired on request.
NAEDO Service
The NAEDO service is supplied by partnering banking institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which allows businesses as well as other bodies to collect payments entirely by computerised means. The service can be used for recovering repayments from clientele (debits). NAEDO is unable to make provision for any credit facility and EFT credit will likely be employed if needed.
NAEDO payment instructions aid numerous presentments thereof. If they're unpaid after the first presentment, credit tracking may be invoked. Credit tracking is optionally available and when picked, the past due NAEDO repayment instruction may be represented during the afternoon of the same working day and for the consecutive number of days selected, twice a day, on working days until eventually payment is attained or till expiry of the tracking period chosen.
All of the NAEDO repayment instructions, are randomised offering all users an equal possibility of obtaining payment and therefore are processed as close as possible after salary credits are paid to the bank accounts of clients early in the morning.
Transacting by way of the NAEDO service
Only debits may be processed with the system. The below criteria will apply:
- Debits may be processed from cheque, certain savings and transmission bank accounts. Debits to bond and subscription share accounts are not allowed. - A max value limit of R5 000 per transaction is in place. The breaking up of transactions to prevent the limit constraints isn't allowed. - All NAEDO payment instructions has to be distinctively discernable through the Agreement Reference and also the settlement cycle.
Scope of the NAEDO service
The NAEDO service includes a variety of accounts allowed through the NAEDO Service regulations and which are held in the Common Monetary Area by partnering financial institutions. A directory of partnering banking institutions is accessible on application.
AEDO Service
The AEDO services are similar to NAEDO in all respects, but can't be very easily disputed as the transaction is started using the account holders card and pin. AEDO is an excellent approach to mitigate collection risk and failures on payment.
Summary
Examples of where EFT and NAEDO services can be utilised is given within my previous post. The AEDO service may effectively be utilized for collection in a circumstance whenever NAEDO could have been utilized.
About the Author:
Make use of debit order collection to collect payment from debtors and improve your business cash flow today. Steven is an expert in EFT systems.
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