In order to understand which debit order solution to implement you will initially require a comprehension of the distinctions with the three primary collection methods: Authenticated Early Debit Order (AEDO), Non-authenticated Early Debit Order (NAEDO) and Electronic Funds Transfer (EFT).
EFT Debits
Starting with the oldest and the most regularly used method, EFT. The EFT services are offered by many contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which makes it possible for companies to process payments completely by computerised means. The service can be utilized both for collecting payments from customers (EFT debits) and also for making payments (EFT credits). Payments can be done for wages, creditors, wages etc. Your enterprise can lodge payments and collections by way of their bank to all collaborating banks.
Transacting via the EFT service
Either debit as well as credits may be processed from the system.
The below requirements is applicable:
- Credits may be processed against current, savings and transmission bank accounts, and within certain situations, bonds, loans and subscription share accounts. Transactions bigger or equal to R5 million rand are not allowed and will be homed back using the reason that it exceeds sector enforced limits. Such transactions needs to be sent through the real-time lines and not the operator.
- Debits are effected from cheque, certain savings and transmission accounts. Debits to bond and subscription share accounts are not allowed. A highest value ceiling of R500,000 per transaction is in place. - The breaking up or dividing of transactions to not have limit restrictions will not be acceptable.
Coverage of the EFT service
The EFT service covers all sorts of accounts permitted by the EFT service rules and which are kept in the Common Monetary Area by participating banking institutions. A list of partnering financial institutions can be acquired on application.
NAEDO Service
The NAEDO service is supplied by collaborating banks (eg. ABSA, FNB, Nedbank and Standard Bank), which enables businesses as well as other bodies to collect repayments totally by computerised method. The service can be used for acquiring payments from clients (debits). NAEDO does not make allowances for a credit facility and EFT credit will be used if required.
NAEDO payment instructions aid numerous presentments thereof. If most are unpaid following the first presentment, credit monitoring may be invoked. Credit tracking is elective and if chosen, the unpaid NAEDO repayment instruction can automatically be represented during the afternoon of the same day and for the successive amount of days chosen, twice a day, on business days until eventually payment is acquired or until expiry of the monitoring period selected.
All of the NAEDO payment instructions, are randomised giving all users an equal chance of receiving payment and are processed as near as is possible after income credits are paid in to the bank accounts of consumers early in the morning.
Transacting with the NAEDO service
Just debits are processed by way of the system. The following conditions will apply:
- Debits may be processed against current, certain savings and transmission accounts. Debits to bond and subscription share accounts are not permitted. - A max value ceiling of R5 000 per transaction is in place. The dividing of transactions to prevent the limit restrictions isn't acceptable. - All NAEDO payment instructions must be distinctively recognizable by the Agreement Reference and payment cycle.
Scope of the NAEDO service
The NAEDO service includes all types of accounts permitted by the NAEDO Service rules and which are held in the Common Monetary Area by participating banks. A list of collaborating banks is accessible on request.
AEDO Service
The AEDO services are similar to NAEDO in all respects, but cannot be very easily questioned because the transaction is initiated using the account holders credit card and pin. AEDO is an excellent strategy to lessen collection risk and failures on payment.
Conclusion
Examples of where EFT and NAEDO services can be utilized is provided within my preceding post. The AEDO service could efficiently be used for collection in a situation whenever NAEDO had been used.
EFT Debits
Starting with the oldest and the most regularly used method, EFT. The EFT services are offered by many contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which makes it possible for companies to process payments completely by computerised means. The service can be utilized both for collecting payments from customers (EFT debits) and also for making payments (EFT credits). Payments can be done for wages, creditors, wages etc. Your enterprise can lodge payments and collections by way of their bank to all collaborating banks.
Transacting via the EFT service
Either debit as well as credits may be processed from the system.
The below requirements is applicable:
- Credits may be processed against current, savings and transmission bank accounts, and within certain situations, bonds, loans and subscription share accounts. Transactions bigger or equal to R5 million rand are not allowed and will be homed back using the reason that it exceeds sector enforced limits. Such transactions needs to be sent through the real-time lines and not the operator.
- Debits are effected from cheque, certain savings and transmission accounts. Debits to bond and subscription share accounts are not allowed. A highest value ceiling of R500,000 per transaction is in place. - The breaking up or dividing of transactions to not have limit restrictions will not be acceptable.
Coverage of the EFT service
The EFT service covers all sorts of accounts permitted by the EFT service rules and which are kept in the Common Monetary Area by participating banking institutions. A list of partnering financial institutions can be acquired on application.
NAEDO Service
The NAEDO service is supplied by collaborating banks (eg. ABSA, FNB, Nedbank and Standard Bank), which enables businesses as well as other bodies to collect repayments totally by computerised method. The service can be used for acquiring payments from clients (debits). NAEDO does not make allowances for a credit facility and EFT credit will be used if required.
NAEDO payment instructions aid numerous presentments thereof. If most are unpaid following the first presentment, credit monitoring may be invoked. Credit tracking is elective and if chosen, the unpaid NAEDO repayment instruction can automatically be represented during the afternoon of the same day and for the successive amount of days chosen, twice a day, on business days until eventually payment is acquired or until expiry of the monitoring period selected.
All of the NAEDO payment instructions, are randomised giving all users an equal chance of receiving payment and are processed as near as is possible after income credits are paid in to the bank accounts of consumers early in the morning.
Transacting with the NAEDO service
Just debits are processed by way of the system. The following conditions will apply:
- Debits may be processed against current, certain savings and transmission accounts. Debits to bond and subscription share accounts are not permitted. - A max value ceiling of R5 000 per transaction is in place. The dividing of transactions to prevent the limit restrictions isn't acceptable. - All NAEDO payment instructions must be distinctively recognizable by the Agreement Reference and payment cycle.
Scope of the NAEDO service
The NAEDO service includes all types of accounts permitted by the NAEDO Service rules and which are held in the Common Monetary Area by participating banks. A list of collaborating banks is accessible on request.
AEDO Service
The AEDO services are similar to NAEDO in all respects, but cannot be very easily questioned because the transaction is initiated using the account holders credit card and pin. AEDO is an excellent strategy to lessen collection risk and failures on payment.
Conclusion
Examples of where EFT and NAEDO services can be utilized is provided within my preceding post. The AEDO service could efficiently be used for collection in a situation whenever NAEDO had been used.
About the Author:
Make use of debit order to collect payment from debtors and improve your business cash flow today. Tim is an expert in account holder verification.
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