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AEDO's migration into the retail and service environments

South African credit providers are greatly dependent on debit orders as a payment channel. Nowadays, more South Africans agree that debit orders are a more convenient way to pay their accounts, saving them time and effort.

There are essentially two types of debit orders: standard debit orders and early morning debit orders, which consists of non-authenticated early debit orders (NAEDO) and authenticated early debit orders (AEDO), with AEDO significantly entrenched in NuPay's DNA, especially in the unsecure lending market.

Traditionally, micro-financiers would keep their borrowers' ATM card and draw the money on their salary payday. This created cash handling risks for the micro-financier and inconvenienced the card holder. The AEDO system allows the merchant to load a single transaction with multiple instalments over a period of time, enabling the account holder to approve or verify debit order transactions. Until now, there has not been much you could do to prevent a third party that has access to your bank account number from placing a NAEDO debit order on your account without your consent.

Notably, we can see an increase in retailers and other service environments adopting this payment technology into their environments. For retailers, AEDO has proven to be a successful way of offering lay-bys and extended payment terms to assist their customers with high-value purchases.

Insurance companies and gyms are also using AEDO to collect their monthly premiums. AEDO has also been widely adopted in the veterinarian and medical fields as practitioners are now able to offer patients more flexible payment terms for unplanned medical costs.

According to the Payments Association of SA (PASA), approximately 48 million debit orders get processed monthly across all industries, with 14.5 million being early debit orders and around one million of these are AEDOs. 

As NuPay's market focus has evolved across these expanding AEDO market segments, so has its product offering in this space. Its POS device has a range of transactions that are available on a single device, including AEDO, debit and credit card (Visa, MasterCard, American Express, Diners Card) as well as Edcon and Fleet cards. NuPay's POS product offering is unique in the market, which allows its retailers and service providers to accept a wide variety of payment types to meet their clients' needs.

NuPay's DebiCheck readiness will also ensure customers have peace of mind by eliminating unauthorised debit orders, reducing fraud and enhancing relationships between merchants and the customers, which is essential in an industry being disrupted by non-bank payment systems such as Samsung Pay, Google, etc.