The South African Reserve Bank (SARB) will be introducing a new debit order system in an effort to make transactions more secure.
The Authenticated Collections (AC)/DebiCheck project will take effect on 1 May 2021. This project is part of the SARB's plan to modernise the National Payment System (NPS).
The NPS will be taking over from the Early Debit Order (EDO) System, which has been highly abused in the debit order system.
The EDO system has previously been victim to fraudulent behaviour in the debit order system. There are hopes that the new system will address and prevent fraud.
The SARB has explained that the AC/DebiCheck project will be starting next month.
“Early debit orders will only be processed through the AC/DebiCheck payment system, while normal debit orders will still be processed later in the day as per current arrangements. Before then, consumers would provide a mandate to a company or user to collect money from their bank account.
“In the new AC/DebiCheck payment system, consumers will provide authorisation to their bank, by way of an authenticated mandate, to release the funds from their account when a debit order is submitted by a company or user from whom they bought goods or contracted for a service,” said the Reserve Bank.
According to the SARB, the rollout of the system has been years in the making. Companies were given until 1 November 2019 to implement the AC/DebiCheck system.
This time period was necessary, as the payment system is more complex than the EDO system.
“Owing to the complex nature of the AC/DebiCheck system, a lengthy ramp-up period was required to ensure that all stakeholders in the EDO collections ecosystem had implemented and tested their internal processes and interfaces to the AC/DebiCheck payment system,” explained the Reserve Bank.