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SARB’s new debit order system comes into effect soon

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Beginning 1 May, the South African Reserve Bank (SARB) will use the Authenticated Collections (AC)/DebiCheck payment system.

The system, according to the SARB, is part of its modernisation of the national payment system (NPS), and seeks to address the increasing levels of abuse in the debit order payment system, known as the early debit order (EDO) payment system.

Furthermore, it’s an initiative of the collections industry, which ensures the safety and efficiency of the NPS, and the mitigation of rogue and fraudulent behaviour in the collections system.

The central bank states that all new and renegotiated early debit order mandates will now emanate from the AC/DebiCheck and not in the current EDO system.

It explains: “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, 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.”

The Reserve Bank points out that companies or users of the system had until 1 November 2019 to fully implement the AC/DebiCheck payment system.

“Owing to the complex nature of the AC/DebiCheck system, a lengthy ramp-up period was required to ensure all stakeholders in the EDO collections ecosystem had implemented and tested their internal processes and interfaces to the AC/DebiCheck payment system.”

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