What is DebiCheck?
DebiCheck is an industry-wide initiative regulated by the Payments Association SA in line with regulated directives from the South African Reserve Bank. DebiCheck is truly a global 1st, enhancing the reputation that the South African baking system is on par with the very best globally. Debicheck is expected to enhance the safety and efficiency of the South African payments and collections system substantially. It will also be the 1st step of the digitisation of debit orders (electronical lodgement of a mandate at the consumers Bank). DebiCheck aims to reduce the number of unauthorised debit orders processed by companies as well as the number of consumer disputes (reversals) as a result of debits without authorisation or the irresponsible management of cashflows.
Why the need for DebiCheck?
The South African Reserve Bank reviewed the Early Collections environment during 2011-2013. The main issues prompting the strategic review of the early collections environment included inter alia:
Difficulty recognising the entity debiting bank account
Increasing concerns/complaints by consumers of not knowing who was debiting their account.
Illegitimate debits
Increasing complaints by consumers of being debited without their consent.
Significantly higher levels of unpaids
Unpaid ratios in NAEDO range between 25-35%. This issue may not directly be resolved; but it is
hoped that the authentication of transactions may reduce unpaids to some extent.
Rising number of disputes
Dispute ratios ranged between 4-6% for NAEDO, a significantly high number. Impacted consumers
usually are from lower LSMs and this created additional concern.
Consumer behaviour
Increasing concerns that customers were disputing transactions to manage their cash flow.
Political pressure to protect consumers
Increasing calls from government and political sources to protect consumers from the above perceived scourge.
The Value Proposition
DebiCheck offers a unique bouquet that aims to:
- Significantly lower levels of unpaid items that enable better cash management for creditors
- First collections allowable in the early processing window (DebiChecks get paid before other normal debit orders)
- Allows for the identification and a mini-account verification (AVS) of payer details before debits are initiated
- Fewer complaints by customers advising that they are unable to identify the party debiting their account which leads to a decrease in the number of queries to billers
- Lower number of complaints by payers being debited without their consent
- Lower number of allowable disputes by payers who try to manage their cash flow
- Allows for the identification and account verification (AVS) of payer details before debits are initiated
- Tracking options which triggers each time a credit is processed to the account
- Option to represent a failed collection, including arrear interest and charges
- Real-time authorisation which includes the message authentication code
- Allows for clients to have different frequency collection periods (data variability)
- Checks to ensure that the debits are in line with mandate specifications (conformance and compliance)
- Allows for once-off and usage mandates to be created (flexibility)
- Interchangeable authentication methods (TT Types) to ensure all consumer preference are catered for
To make use of our end-to-end DebiCheck solution platform please contact our sales team sales@tcpaymentsolutions.co.za