Payments industry launches new type of debit order
Four years in the making, a new type of debit order, DebiCheck, is nearing completion. Created as a result of increased concern over the number of unauthorised debit orders being processed, this new debit order system will only authorise a debit order to be processed to a consumer’s account if the mandate for such has been electronically confirmed by the consumer.
Walter Volker (pictured), CEO of the Payments Association of South Africa, said:
"This project is one of the largest interbank payment projects we have had to date - it is an entire eco-system change, with big complexities and notable infrastructure changes that will affect banks, consumers and users."
To support this new electronic confirmation process, banks have developed several ways in which they will obtain such confirmation, for example, through USSD messaging to cellphones, banking applications, and by utilising traditional channels such as online banking, ATMs or branches.
With DebiCheck, banks will now have an electronic record of the debit order information consumers confirmed and will check such information before they process the debit order to the consumer's bank account. DebiCheck debit orders will not be processed by the bank if they are outside the agreed conditions the consumer confirmed initially.
DebiCheck will be implemented in a phased approach, over a two-year period, starting later this year. Not all companies participating in DebiCheck will start using DebiCheck immediately but will slowly convert to the new system.