So that you can comprehend which debit order method to use you will initially have to have an awareness of the variances in the three leading collection procedures: Authenticated Early Debit Order (AEDO), Non-authenticated Early Debit Order (NAEDO) and Electronic Funds Transfer (EFT).
EFT Debits
Starting with the first and the most regularly used method, EFT. The EFT services are offered by numerous contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which makes it possible for organizations to process payments totally by computerised means. The service may be used for both obtaining payments from clientele (EFT debits) and also for paying (EFT credits). Payments can be made for wages, creditors, wages etc. Your company may lodge payments and collections by way of their bank to all contributing banks.
Transacting through the EFT service
Either debit and credits may be processed with the system.
The following criteria applies:
- Credits may be effected against current, savings and transmission bank accounts, and under specific situations, bonds, loans and subscription share accounts. Transactions bigger or equal to R5 million rand won't be acceptable and will be homed back using the reason that it exceeds market imposed limits. Such transactions needs to be re-routed via the realtime line but not the operator.
- Debits may be processed against 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 dividing of transactions to prevent limit restrictions will not be authorized.
Coverage of the EFT service
The EFT service handles all sorts of accounts acceptable by the EFT service rules and which are held in the Common Monetary Area by participating banks. A listing of partnering banks can be obtained on request.
NAEDO Service
The NAEDO service is provided by partnering banking institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which allows companies as well as other bodies to process repayments entirely by computerised methods. The service can be used for acquiring repayments from customers (debits). NAEDO does not make provision to get a credit facility and EFT credit will be implemented if required.
NAEDO repayment guidelines aid numerous presentments thereof. If these are unpaid following the first presentment, credit tracking can be invoked. Credit monitoring is optional and when selected, the unpaid NAEDO repayment instruction can automatically be represented throughout the mid-day of the same business day and for the consecutive number of days chosen, twice daily, on business days till payment is acquired or until expiry of the monitoring period selected.
All of the NAEDO repayment instructions, will be randomised providing all users an identical chance of getting money and are processed as close as possible after salary credits are payed to the bank accounts of clients in the early morning.
Transacting using the NAEDO service
Only debits can be processed through the system. The subsequent conditions will apply:
- Debits may be processed against current, certain savings and transmission accounts. Debits to bond and subscription share accounts are not authorized. - A highest value ceiling of R5 000 per transaction is in place. The dividing of transactions to avoid the limit restrictions is not allowed. - All NAEDO payment instructions should be distinctively discernable through the Agreement Reference and payment period.
Scope of the NAEDO service
The NAEDO service includes all types of bank accounts allowed by way of the NAEDO Service policies and which are kept in the Common Monetary Area by participating banks. A listing of collaborating banking institutions can be obtained on request.
AEDO Service
The AEDO service is much like NAEDO in most respects, but can't be very easily challenged because the transaction is started with the customers card and pin. AEDO is an excellent strategy to reduce collection risk and failures on payment.
Summary
Instances of where EFT and NAEDO services can be utilized is offered in my previous post. The AEDO service may efficiently be used for collection in any scenario whenever NAEDO could have been made use of.
EFT Debits
Starting with the first and the most regularly used method, EFT. The EFT services are offered by numerous contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which makes it possible for organizations to process payments totally by computerised means. The service may be used for both obtaining payments from clientele (EFT debits) and also for paying (EFT credits). Payments can be made for wages, creditors, wages etc. Your company may lodge payments and collections by way of their bank to all contributing banks.
Transacting through the EFT service
Either debit and credits may be processed with the system.
The following criteria applies:
- Credits may be effected against current, savings and transmission bank accounts, and under specific situations, bonds, loans and subscription share accounts. Transactions bigger or equal to R5 million rand won't be acceptable and will be homed back using the reason that it exceeds market imposed limits. Such transactions needs to be re-routed via the realtime line but not the operator.
- Debits may be processed against 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 dividing of transactions to prevent limit restrictions will not be authorized.
Coverage of the EFT service
The EFT service handles all sorts of accounts acceptable by the EFT service rules and which are held in the Common Monetary Area by participating banks. A listing of partnering banks can be obtained on request.
NAEDO Service
The NAEDO service is provided by partnering banking institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which allows companies as well as other bodies to process repayments entirely by computerised methods. The service can be used for acquiring repayments from customers (debits). NAEDO does not make provision to get a credit facility and EFT credit will be implemented if required.
NAEDO repayment guidelines aid numerous presentments thereof. If these are unpaid following the first presentment, credit tracking can be invoked. Credit monitoring is optional and when selected, the unpaid NAEDO repayment instruction can automatically be represented throughout the mid-day of the same business day and for the consecutive number of days chosen, twice daily, on business days till payment is acquired or until expiry of the monitoring period selected.
All of the NAEDO repayment instructions, will be randomised providing all users an identical chance of getting money and are processed as close as possible after salary credits are payed to the bank accounts of clients in the early morning.
Transacting using the NAEDO service
Only debits can be processed through the system. The subsequent conditions will apply:
- Debits may be processed against current, certain savings and transmission accounts. Debits to bond and subscription share accounts are not authorized. - A highest value ceiling of R5 000 per transaction is in place. The dividing of transactions to avoid the limit restrictions is not allowed. - All NAEDO payment instructions should be distinctively discernable through the Agreement Reference and payment period.
Scope of the NAEDO service
The NAEDO service includes all types of bank accounts allowed by way of the NAEDO Service policies and which are kept in the Common Monetary Area by participating banks. A listing of collaborating banking institutions can be obtained on request.
AEDO Service
The AEDO service is much like NAEDO in most respects, but can't be very easily challenged because the transaction is started with the customers card and pin. AEDO is an excellent strategy to reduce collection risk and failures on payment.
Summary
Instances of where EFT and NAEDO services can be utilized is offered in my previous post. The AEDO service may efficiently be used for collection in any scenario whenever NAEDO could have been made use of.
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 NAEDO systems.
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