In today’s ever widening realm of payment collections the debit order reigns superior as the best affordable answer to successful bulk payment collection. In case you have contemplated setting out to utilize debit order payments for your collections then check out this article to get a summary of this transaction collection approach.
Let’s first take a look at precisely what a debit order is. A debit order is defined as a payment instruction typically useful for the monthly collection of cash. A debit order offers a 3rd party authority to recover cash out of your account or payment card via a written, telephonic or electronic debit mandate.
Then you might ask, what’s the difference between a debit order and a stop order? Well, it is easy to understand, a stop order is an instruction which you issue with your bank to produce a series of future dated recurring payments, whereas a debit order is usually an instruction you choose to provide to a third party.
Seeing that we’ve got that cleared up, do you realize that there is more than one kind of debit order? Yes, there are actually three forms of debit orders in common use throughout the payment collection industry:
EFT debit orders, AEDO (Authenticated Early Debit Orders) and NAEDO (Non Authenticated Early Debit Orders).
All these are facilities which facilitate a 3rd party to recover money originating from a customers account. EFT debit orders are the standard debit order payment instructions directed by a third party to the charge card or banking account of the paying client with regard to a instruction granted by the customer. AEDO and NAEDO are payment systems which facilitate the processing of Early Debit Orders (EDO) that’s simply a debit order processed close to credit payment. AEDO needs pin authentication from a pos while NAEDO’s don’t. This restricts NAEDO debit order submission to banking accounts only.
Now you recognize what they’re, why would you use debit orders? It’s very simple; debit orders help you moderate your payment collection. NAEDO’s allow monitoring on accounts to process a payment close to a credit payment so that your chance of collecting payments increase and with that so does your cash flow. You save your customers cash on bank charges and you also receive accurate reconciliation info about paid and unpaid payments immediately.
With that said adopting debit orders for your businesses payment collections will provide you with greater control over payment collection, increased revenue as well as leaving you within a better financial position.
Author: Tim SmartThis author has published 1 articles so far.