The difference between debit order, debit order to credit cards & AEDO/NAEDO (DebiCheck)

Direct Debit are industry leaders in debit order collections in South Africa. Whether you are looking for normal debit orders, debit order from cards or NAEDO collections, with or without Account Holder Verification, Direct Debit has you covered.

In order to understand which debit order facility to make use of you will first need to have an understanding of the differences in the four major debit order collection facilities: Electronic Funds Transfer (EFT) and Credit/Debit card collections Authenticated Early Debit Order (AEDO) and Non-authenticated Early Debit Order (NAEDO).

EFT Debits (normal debit order)

EFT debit order collection is a way for you to collect money from a person’s bank account with their express permission. This type of collection is the oldest and most widely used method and is commonly used to collect premiums, subscriptions or monthly payments. This debit order service can be used both for collecting payments from clients (EFT debits) and for making payments (EFT credits). Payments can be made for salaries, creditors, wages etc.

Debit orders ensure your business the best possible cash flow obtainable while saving you and your clients on hefty bank fees. Direct Debit also integrates with all major South African banks and ensure your transactions are settled in a reliable, timely and highly effective manner.

Card Collections (debit order from cards)

Credit cards are one of the most widely used online payment methods. Our card collections (debit order from debit or credit card) allows sellers to accept both local and international payments. You will be able to accept card payments directly from your website and process payments on a recurring basis after the client has signed up.

EFT debit order collection from credit cards are processed on a recurring basis as same day debits from all major credit cards, including VISA, MasterCard, American Express and Diners Club.

We require that all card data be stored in a PCI compliant environment. Our partner SnapBill provides the fully compliant PCI environment for the secure storage of credit card data. Access to the PCI vault comes standard with every account and this allows us to seamlessly process your recurring credit card transactions.

AEDO Service (Authenticated Early Debit Order)

The Authenticated Early Debit Order (AEDO) enables an account holder to mandate the contracted future dated early debit orders using his/her bank cards by entering a PIN.

The AEDO service is similar to NAEDO in all respects, but cannot be easily disputed as the transaction is initiated with the account holders card and pin. AEDO is an effective solution to mitigate collection risk and defaults on payment. This service is only supplied by a limited number of businesses in South Africa.

NAEDO Service (Non-Authenticated Early Debit Order)

Non-Authenticated Early Debit Order (NAEDO) allows qualifying service providers and consumers transacting with this service the equivalent benefit of AEDO, but without the PIN authentication requirement.

NAEDO payment instructions support multiple presentments thereof. If these are unpaid after the first presentment, credit tracking may be invoked. Credit tracking is optional and if selected, the unpaid NAEDO payment instruction will automatically be represented during the afternoon of the same business day and for the consecutive amount of days selected, twice a day, on business days until payment is received or until expiry of the tracking period selected.

Only participating banks can process AEDO/NAEDO and include ABSA, African Bank, Bidvest Bank, Capitec Bank, Citibank, Finbond Mutual Bank, FNB, Mercantile Bank, Nedbank, Bank of Athens, Standard Bank and Ubank.

DebiCheck

DebiCheck is the process whereby consumers will electronically confirm to their bank that they are in the process of doing business with a company/user and that they agree to the details of the specific debit order series. Once the consumer has authenticated the debit order series, the bank will check the collection from the consumer against the user’s authenticated mandate to ensure that the debit is within the parameters the consumer agreed to, prior to processing.

This facility will be replacing both AEDO and NAEDO transactions and will work in the same manner for processing than AEDO or NAEDO with additional authentication of each mandate.

In summary

EFT debits (normal debit order) are the most beneficial to use as they are the most cost-effective way to collect funds from normal bank accounts. Card collections are used if you want to process cards online and can be pricier due to PCI compliance and merchant fees.

AEDO/NAEDO is normal debit order with the option of tracking, where tracking is used to make multiple representments of a payment. DebiCheck will be replacing both AEDO and NAEDO and will require the customer to authenticate the mandate via the prescribed banking channel.