Good Insurance Debit Orders That Increase Your Collection Rates
Ask not what your small business can do for payment collection, but what efficient, low cost payment collection can do for your business. One of the most efficient, low cost payment methods available today is a NAEDO or Non-Authenticated Early Debit Order. This payment system combines the efficacy of debit orders with the smart tracking of credit payments to increase your chances of successful collections and reduce fees spent on retries and returned debits.
NAEDO debit orders were introduced along with AEDO or Authenticated Early Debit Orders in South Africa in September 2006. These relatively new payment systems were introduced to increase debit order efficacy by allowing smart, fair action of a debit order as close to a credit payment (e.g. salary deposit) as possible. AEDO payments are usually linked to pos transactions where a future dated debit is mandated by pin authentication, on a debit or credit card or bank account for instance. NAEDO debits do not require pin authorization, have a R5,000.00 per item transaction cap and are only authorized to be submitted on bank accounts.
To eliminate the growing problem of preferential payment access where some classes of beneficiaries always had access to account holder funds before others the NAEDO and its contemporaries were introduced. The introduction of new legislation allowed for the phasing out of existing preferential practices eliminating unfair reduced collection success rates for certain beneficiary classes and establishing an equal playing field for all. NAEDO's are processed on a random, non-preferential basis, providing every beneficiary or service provider with an equal and fair opportunity to collect payments.
The magic behind a Non-Authenticated Early Debit Order (NAEDO) is that it can be enhanced by the use of tracking facilities. This means the beneficiary or service provider can stretch the mandated date over a specified period of time allowing the debit order instruction to be kept active, but unprocessed, until a credit payment is receive in the account. This significantly increases the creditor's chances of collecting.
All taken into account, a NAEDO will not only give your business a fair chance of collecting funds, but increases your likelihood to do so by allowing tracking to trigger the debit at the most opportune time. So if you are worried about your collection efficacy now may be the time to change to NAEDO.
NAEDO debit orders were introduced along with AEDO or Authenticated Early Debit Orders in South Africa in September 2006. These relatively new payment systems were introduced to increase debit order efficacy by allowing smart, fair action of a debit order as close to a credit payment (e.g. salary deposit) as possible. AEDO payments are usually linked to pos transactions where a future dated debit is mandated by pin authentication, on a debit or credit card or bank account for instance. NAEDO debits do not require pin authorization, have a R5,000.00 per item transaction cap and are only authorized to be submitted on bank accounts.
To eliminate the growing problem of preferential payment access where some classes of beneficiaries always had access to account holder funds before others the NAEDO and its contemporaries were introduced. The introduction of new legislation allowed for the phasing out of existing preferential practices eliminating unfair reduced collection success rates for certain beneficiary classes and establishing an equal playing field for all. NAEDO's are processed on a random, non-preferential basis, providing every beneficiary or service provider with an equal and fair opportunity to collect payments.
The magic behind a Non-Authenticated Early Debit Order (NAEDO) is that it can be enhanced by the use of tracking facilities. This means the beneficiary or service provider can stretch the mandated date over a specified period of time allowing the debit order instruction to be kept active, but unprocessed, until a credit payment is receive in the account. This significantly increases the creditor's chances of collecting.
All taken into account, a NAEDO will not only give your business a fair chance of collecting funds, but increases your likelihood to do so by allowing tracking to trigger the debit at the most opportune time. So if you are worried about your collection efficacy now may be the time to change to NAEDO.