When you should utilize AEDO, NAEDO or EFT debits to collect capital

So as to understand which debit order strategy to use you may first need to have an awareness of the distinctions in the three important collection techniques: Authenticated Early Debit Order (AEDO), Non-authenticated Early Debit Order (NAEDO) and Electronic Funds Transfer (EFT).

EFT Debits

Lets start with the first and the most regularly used method, EFT. The EFT services are offered by several contributing banks (eg. ABSA, FNB, Nedbank and Standard Bank), which enables companies to process payments totally by computerised means. The service may be used both for recovering payments from customers (EFT debits) as well as for making payments (EFT credits). Payments can be done for wages, creditors, wages etc. Your company can lodge payments and collections through their bank to all contributing banks.

Transacting via the EFT service

Both debit and credits may be processed from the system.

The subsequent criteria applies:

– Credits may be effected against current, savings and transmission accounts, and under certain situations, bonds, loans and subscription share accounts. Transactions greater or equivalent to R5 million rand are not acceptable and will be homed back using the reason that it surpasses industry imposed restraints. Such transactions ought to be routed through the real time line and not the operator.

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

Scope of the EFT service

The EFT service handles all kinds of accounts permitted by way of the EFT service rules and which are held in the Common Monetary Area by participating banking institutions. A listing of collaborating financial institutions is accessible on request.

NAEDO Service

The NAEDO service is available from participating financial institutions (eg. ABSA, FNB, Nedbank and Standard Bank), which enables organizations as well as other bodies to collect payments completely by computerised methods. The service can be used for acquiring repayments from clients (debits). NAEDO doesn’t make allowances to get a credit facility and EFT credit will likely be utilized if needed.

NAEDO payment guidelines aid multiple presentments thereof. If these are unpaid following the first presentment, credit monitoring can be invoked. Credit tracking is optionally available and when picked, the unpaid NAEDO repayment instruction can automatically be represented throughout the afternoon of the same day and for the successive number of days chosen, twice a day, on business days until eventually payment is acquired or till expiration of the tracking period selected.

All of the NAEDO payment instructions, will be randomised offering all users an equal chance of getting money and are effected as near as is possible after income credits are paid in to the bank accounts of consumers early in the morning.

Transacting using the NAEDO service

Just debits are processed through the system. The subsequent criteria will apply:

– Debits may be effected from 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 avoid the limit restrictions isn’t accepted. – All NAEDO payment instructions has to be distinctively discernable by way of the Agreement Reference as well as payment period.

Scope of the NAEDO service

The NAEDO service features a variety of bank accounts acceptable through the NAEDO Service policies and which are held in the Common Monetary Area by participating banks. A list of partnering banking institutions can be acquired on application.

AEDO Service

The AEDO services are comparable to NAEDO in most respects, but can’t be easily disputed as the transaction is initiated using the customers credit card and pin. AEDO is an effective solution to offset collection risk and failures on payment.


Instances of where EFT and NAEDO services can be employed is provided within my previous post. The AEDO service could successfully be utilized for collection in a scenario whenever NAEDO may have been put to use.

Make use of direct debits to collect payment from debtors and improve your business cash flow today. Debby is an expert in account holder verification.

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