To be able to recognize which debit order solution to use you are going to first have to have a comprehension of the variations with the three leading collection approaches: Authenticated Early Debit Order (AEDO), Non-authenticated Early Debit Order (NAEDO) and Electronic Funds Transfer (EFT).
EFT Debits
We begin with the oldest and the most widely used method, EFT. The EFT service is available from many participating banks (eg. ABSA, FNB, Nedbank and Standard Bank), that makes it possible for enterprises to process payments totally by computerised means. The service can be used for both obtaining payments from clients (EFT debits) and also for paying (EFT credits). Payments can be done for wages, creditors, wages etc. Your company may lodge payments and collections by way of their bank to all participating banks.
Transacting via the EFT service
Either debit as well as credits can be processed from the system.
The subsequent conditions is applicable:
- Credits can be processed towards current, savings and transmission accounts, and under certain situations, bonds, loans and subscription share accounts. Transactions bigger or equivalent to R5 million rand will not be acceptable and will be homed back with the reason that it exceeds sector enforced restraints. Such transactions should be re-routed through the real time lines but not the operator.
- Debits may be processed from current, certain savings and transmission accounts. Debits to bond and subscription share accounts are not allowed. A maximum value ceiling of R500,000 per transaction is in place. - The breaking up or dividing of transactions to not have limit restrictions aren't accepted.
Coverage of the EFT service
The EFT service covers all kinds of accounts acceptable by way of the EFT service rules and which are held in the Common Monetary Area by participating banking institutions. A listing of participating banks is obtainable on application.
NAEDO Service
The NAEDO service is provided by collaborating banking institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which allows companies as well as other bodies to collect payments fully by computerised method. The service can be used for collecting payments from clientele (debits). NAEDO is unable to make provision for any credit facility and EFT credit will likely be implemented if need be.
NAEDO repayment guidelines aid multiple presentments thereof. If most are unpaid following the first presentment, credit monitoring may be invoked. Credit tracking is optional and if chosen, the unpaid NAEDO repayment instruction can be represented during the mid-day of the same working day and for the sequential number of days selected, twice daily, on working days until eventually payment is acquired or till expiry of the tracking interval selected.
All of the NAEDO payment instructions, will be randomised giving all users an equal chance of receiving payment and therefore are effected as close as is feasible after salary credits are paid in to the bank accounts of Customers early in the day.
Transacting by way of the NAEDO service
Just debits may be processed by way of the system. The following conditions will apply:
- Debits may be effected against cheque, certain savings and transmission accounts. Debits to bond and subscription share accounts are not authorized. - A max value limit of R5 000 per transaction is in place. The breaking up of transactions to avoid the limit constraints is not accepted. - All NAEDO payment instructions has to be distinctively recognizable through the Agreement Reference as well as settlement cycle.
Coverage associated with the NAEDO service
The NAEDO service handles a variety of bank accounts permitted through the NAEDO Service regulations and which are held in the Common Monetary Area by partnering financial institutions. A list of participating financial institutions can be acquired on request.
AEDO Service
The AEDO service is comparable to NAEDO in most respects, but can't be easily questioned as the transaction is initiated with the account holders credit card and pin. AEDO is an effective approach to reduce collection risk and defaults on payment.
Bottom line
Examples of where EFT and NAEDO services may be used is provided inside my preceding post. The AEDO service could effectively be used for collection in almost any situation when NAEDO may have been utilized.
EFT Debits
We begin with the oldest and the most widely used method, EFT. The EFT service is available from many participating banks (eg. ABSA, FNB, Nedbank and Standard Bank), that makes it possible for enterprises to process payments totally by computerised means. The service can be used for both obtaining payments from clients (EFT debits) and also for paying (EFT credits). Payments can be done for wages, creditors, wages etc. Your company may lodge payments and collections by way of their bank to all participating banks.
Transacting via the EFT service
Either debit as well as credits can be processed from the system.
The subsequent conditions is applicable:
- Credits can be processed towards current, savings and transmission accounts, and under certain situations, bonds, loans and subscription share accounts. Transactions bigger or equivalent to R5 million rand will not be acceptable and will be homed back with the reason that it exceeds sector enforced restraints. Such transactions should be re-routed through the real time lines but not the operator.
- Debits may be processed from current, certain savings and transmission accounts. Debits to bond and subscription share accounts are not allowed. A maximum value ceiling of R500,000 per transaction is in place. - The breaking up or dividing of transactions to not have limit restrictions aren't accepted.
Coverage of the EFT service
The EFT service covers all kinds of accounts acceptable by way of the EFT service rules and which are held in the Common Monetary Area by participating banking institutions. A listing of participating banks is obtainable on application.
NAEDO Service
The NAEDO service is provided by collaborating banking institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which allows companies as well as other bodies to collect payments fully by computerised method. The service can be used for collecting payments from clientele (debits). NAEDO is unable to make provision for any credit facility and EFT credit will likely be implemented if need be.
NAEDO repayment guidelines aid multiple presentments thereof. If most are unpaid following the first presentment, credit monitoring may be invoked. Credit tracking is optional and if chosen, the unpaid NAEDO repayment instruction can be represented during the mid-day of the same working day and for the sequential number of days selected, twice daily, on working days until eventually payment is acquired or till expiry of the tracking interval selected.
All of the NAEDO payment instructions, will be randomised giving all users an equal chance of receiving payment and therefore are effected as close as is feasible after salary credits are paid in to the bank accounts of Customers early in the day.
Transacting by way of the NAEDO service
Just debits may be processed by way of the system. The following conditions will apply:
- Debits may be effected against cheque, certain savings and transmission accounts. Debits to bond and subscription share accounts are not authorized. - A max value limit of R5 000 per transaction is in place. The breaking up of transactions to avoid the limit constraints is not accepted. - All NAEDO payment instructions has to be distinctively recognizable through the Agreement Reference as well as settlement cycle.
Coverage associated with the NAEDO service
The NAEDO service handles a variety of bank accounts permitted through the NAEDO Service regulations and which are held in the Common Monetary Area by partnering financial institutions. A list of participating financial institutions can be acquired on request.
AEDO Service
The AEDO service is comparable to NAEDO in most respects, but can't be easily questioned as the transaction is initiated with the account holders credit card and pin. AEDO is an effective approach to reduce collection risk and defaults on payment.
Bottom line
Examples of where EFT and NAEDO services may be used is provided inside my preceding post. The AEDO service could effectively be used for collection in almost any situation when NAEDO may have been utilized.
About the Author:
Make use of debit order to collect payment from debtors and improve your business cash flow today. Steven is an expert in NAEDO collections.
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