CAPE TOWN – Debit order abuse has been a thorn in the side of the national payment system for years, costing consumers and banks in excess of R1.6 billion every year.
Last month, the authenticated collection system, DebiCheck, finally went live. It is spearheaded by the Payments Association of South Africa (Pasa) and the SA Reserve Bank.
But it will take a while before all rogue collections from consumer accounts are halted: DebiCheck applies to new debit order mandates. From next year November, all new debit orders will have to comply with the verification process and the old, non-DebiCheck debit orders will be terminated.
Once fully implemented, no debit order will be paid from a consumer’s account unless it is with their express, verified approval. It is hoped the system will stamp out rogue debit orders, which are processed without consent, and put a stop to consumers reversing or disputing valid debit orders whether due to cash flow management issues or for other reasons.
In the third quarter of 2018, an increased focus on debit order abuse led to a Pasa survey to determine how widespread abuse of the debit order system is.