To be able to understand which debit order method to use you'll first require a comprehension of the distinctions inside the three main collection procedures: Authenticated Early Debit Order (AEDO), Non-authenticated Early Debit Order (NAEDO) and Electronic Funds Transfer (EFT).
EFT Debits
We begin with the eldest and most widely used method, EFT. The EFT service is available from several contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which in turn enables businesses to process payments entirely by computerised means. The service can be utilized both for recovering payments from clientele (EFT debits) as well as for making payments (EFT credits). Payments can be done for wages, creditors, paychecks etc. Your company can lodge payments and collections by way of their bank to all contributing banks.
Transacting using the EFT service
Both debit and credits may be processed through the system.
The next few conditions applies:
- Credits can be effected against current, savings and transmission accounts, and under certain circumstances, bonds, loans and subscription share bank accounts. Transactions higher or equivalent to R5 million rand won't be accepted and will be homed back using the reason that it exceeds industry imposed limits. Such transactions ought to be routed via the real-time lines but not the operator.
- Debits are processed against current, certain savings and transmission accounts. Debits to bond and monthly subscription share accounts are not allowed. A highest value ceiling of R500,000 per transaction is in place. - The separating or dividing of transactions to not have limit constraints are not accepted.
Coverage of the EFT service
The EFT service covers all types of accounts permitted by the EFT service rules and which are held in the Common Monetary Area by collaborating banking institutions. A list of partnering financial institutions is obtainable on application.
NAEDO Service
The NAEDO service is supplied by partnering financial institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which allows enterprises and other bodies to process payments totally by computerised method. The service can be used for recovering repayments from customers (debits). NAEDO is unable to make allowances for a credit facility and EFT credit might be used if needed.
NAEDO repayment instructions aid multiple presentments thereof. If these are unpaid following the first presentment, credit tracking may be invoked. Credit monitoring is elective and when picked, the unpaid NAEDO repayment instruction can be represented throughout the mid-day of the same business day and for the successive amount of days selected, two times a day, on working days till payment is acquired or until expiration of the monitoring period selected.
All of the NAEDO payment instructions, will be randomised supplying all users an identical possibility of obtaining payment and therefore are effected as near as is feasible after income credits are paid in to the bank accounts of Customers early in the morning.
Transacting via the NAEDO service
Just debits are processed with the system. The below conditions will apply:
- Debits may be processed from current, certain savings and transmission accounts. Debits to bond and subscription share accounts are not permitted. - A highest value ceiling of R5 000 per transaction is in place. The breaking up of transactions to avoid the limit constraints is not permitted. - All NAEDO payment instructions has to be uniquely discernable by way of the Agreement Reference and also the repayment period.
Coverage associated with the NAEDO service
The NAEDO service includes all types of bank accounts permitted by the NAEDO Service regulations and which are kept in the Common Monetary Area by participating banking institutions. A listing of partnering financial institutions is obtainable on request.
AEDO Service
The AEDO service is similar to NAEDO in most respects, but cannot be easily questioned as the transaction is started with the customers credit card and pin. AEDO is an effective strategy to lessen collection risk and defaults on payment.
Bottom line
Instances of where EFT and NAEDO services may be used is offered within my preceding post. The AEDO service could successfully be utilized for collection in almost any situation whenever NAEDO might have been put to use.
EFT Debits
We begin with the eldest and most widely used method, EFT. The EFT service is available from several contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which in turn enables businesses to process payments entirely by computerised means. The service can be utilized both for recovering payments from clientele (EFT debits) as well as for making payments (EFT credits). Payments can be done for wages, creditors, paychecks etc. Your company can lodge payments and collections by way of their bank to all contributing banks.
Transacting using the EFT service
Both debit and credits may be processed through the system.
The next few conditions applies:
- Credits can be effected against current, savings and transmission accounts, and under certain circumstances, bonds, loans and subscription share bank accounts. Transactions higher or equivalent to R5 million rand won't be accepted and will be homed back using the reason that it exceeds industry imposed limits. Such transactions ought to be routed via the real-time lines but not the operator.
- Debits are processed against current, certain savings and transmission accounts. Debits to bond and monthly subscription share accounts are not allowed. A highest value ceiling of R500,000 per transaction is in place. - The separating or dividing of transactions to not have limit constraints are not accepted.
Coverage of the EFT service
The EFT service covers all types of accounts permitted by the EFT service rules and which are held in the Common Monetary Area by collaborating banking institutions. A list of partnering financial institutions is obtainable on application.
NAEDO Service
The NAEDO service is supplied by partnering financial institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which allows enterprises and other bodies to process payments totally by computerised method. The service can be used for recovering repayments from customers (debits). NAEDO is unable to make allowances for a credit facility and EFT credit might be used if needed.
NAEDO repayment instructions aid multiple presentments thereof. If these are unpaid following the first presentment, credit tracking may be invoked. Credit monitoring is elective and when picked, the unpaid NAEDO repayment instruction can be represented throughout the mid-day of the same business day and for the successive amount of days selected, two times a day, on working days till payment is acquired or until expiration of the monitoring period selected.
All of the NAEDO payment instructions, will be randomised supplying all users an identical possibility of obtaining payment and therefore are effected as near as is feasible after income credits are paid in to the bank accounts of Customers early in the morning.
Transacting via the NAEDO service
Just debits are processed with the system. The below conditions will apply:
- Debits may be processed from current, certain savings and transmission accounts. Debits to bond and subscription share accounts are not permitted. - A highest value ceiling of R5 000 per transaction is in place. The breaking up of transactions to avoid the limit constraints is not permitted. - All NAEDO payment instructions has to be uniquely discernable by way of the Agreement Reference and also the repayment period.
Coverage associated with the NAEDO service
The NAEDO service includes all types of bank accounts permitted by the NAEDO Service regulations and which are kept in the Common Monetary Area by participating banking institutions. A listing of partnering financial institutions is obtainable on request.
AEDO Service
The AEDO service is similar to NAEDO in most respects, but cannot be easily questioned as the transaction is started with the customers credit card and pin. AEDO is an effective strategy to lessen collection risk and defaults on payment.
Bottom line
Instances of where EFT and NAEDO services may be used is offered within my preceding post. The AEDO service could successfully be utilized for collection in almost any situation whenever NAEDO might have been put to use.
About the Author:
Make use of a debit order system to collect payment from debtors and improve your business cash flow today. Steven is an expert in EFT facilities.
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