When to start using AEDO, NAEDO or EFT debits to acquire funds

So that you can understand which debit order solution to use you’ll initially have to have a comprehension of the variances in the three significant collection procedures: Authenticated Early Debit Order (AEDO), Non-authenticated Early Debit Order (NAEDO) and Electronic Funds Transfer (EFT).

EFT Debits

Lets start with the oldest and most regularly used method, EFT. The EFT services are available from numerous contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which enables organizations to process payments totally by computerised means. The service can be utilised both for recovering payments from clientele (EFT debits) and for making payments (EFT credits). Payments can be made for wages, creditors, paychecks etc. Your company may lodge payments and collections by means of their bank to all participating banks.

Transacting through the EFT service

Either debit as well as credits may be processed with the system.

The next few requirements is applicable:

– Credits can be processed towards cheque, savings and transmission bank accounts, and in specific situations, bonds, loans and subscription share accounts. Transactions larger or equivalent to R5 million rand will not be acceptable and will be homed back using the reason that it exceeds sector imposed restraints. These kinds of transactions needs to be sent through the actual time lines but not the operator.

– Debits can be processed against cheque, certain savings and transmission accounts. Debits to bond and monthly subscription share accounts aren’t allowed. A greatest value limit of R500,000 per transaction is in place. – The breaking up or splitting of transactions to not have limit constraints aren’t authorized.

Scope 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 listing of partnering financial institutions can be acquired on request.

NAEDO Service

The NAEDO service is available from participating banking institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which enables companies as well as other bodies to collect repayments entirely by computerised means. The service can be used for acquiring payments from customers (debits). NAEDO doesn’t make provision for any credit facility and EFT credit might be used if needed.

NAEDO payment guidelines support numerous presentments thereof. If they are unpaid following the first presentment, credit tracking can be invoked. Credit tracking is elective and if selected, the past due NAEDO payment instruction can be represented during the mid-day of the same working day and for the sequential number of days chosen, two times a day, on business days until payment is received or until expiration of the tracking period chosen.

All NAEDO payment instructions, are randomised giving all users an identical possibility of receiving payment and are processed as close as is possible after income credits are payed to the bank accounts of clients early in the day.

Transacting via the NAEDO service

Only debits are processed through the system. The below criteria will apply:

– Debits may be effected against cheque, certain savings and transmission accounts. Debits to bond and subscription share accounts are not granted. – A maximum value ceiling of R5 000 per transaction is in place. The splitting of transactions to avoid the limit constraints isn’t acceptable. – All NAEDO payment instructions must be uniquely discernable by the Agreement Reference as well as repayment cycle.

Scope associated with the NAEDO service

The NAEDO service includes a variety of bank accounts accepted by way of the NAEDO Service policies and which are held in the Common Monetary Area by participating banks. A listing of collaborating financial institutions can be acquired on request.

AEDO Service

The AEDO services are much like NAEDO in most respects, but can not be very easily challenged because the transaction is initiated using the customers credit card and pin. AEDO is an excellent solution to offset collection risk and failures on payment.

Bottom line

Examples of where EFT and NAEDO services may be used is provided inside my previous article. The AEDO service could successfully be used for collection in any scenario whenever NAEDO could have been put to use.

Make use of debit orders to collect payment from debtors and improve your business cash flow today. Debby is an expert in NAEDO collections.