Banks to soon scrap early debit order system
Follow us:

« | »

Banks to soon scrap early debit order system

Updated: 09:45 12-01-2018

According to MoneyWeb, banks will soon scrao early debit order collections, this decision comes in efforts to combat debit order fraud.

DebiCheck, a world-first debit order authentication system, is currently being tested across 11 domestic banks, is said to replace Authenticated Early Debit Order (AEDO) and Non-Authenticated Early Debit Orders (NAEDO). Therefore, companies that do not use the system will no longer be able to collect money just after midnight when salaries hit consumer bank accounts. They will have to do so later in the day via normal EFT debit orders, says the Payments Association of South Africa (Pasa).

DebiCheck, which is set to be implemented by South African Reserve Bank’s in February 2019. The system promises to curb abuse by allowing banks, companies and consumers to verify and authenticate debit orders.

Pasa’s chief executive officer, Walter Volker, says “If someone wants to introduce a debit order instruction, they must contact the bank. The bank must then contact its client and inform them of the company name, the amount and time period of the [proposed] debit order and get their consent. The bank will then register this on a database and only when authenticated, will it be processed,”.

 On average, R36.6 million debit orders valued at R66 billion are processed each month, of which 1.6% of monthly volumes are disputed.

All disputes centre around NAEDO transactions, which account for 14.8 million debit orders worth R11.5 billion. NAEDO transactions are processed prior to the date agreed upon by service providers or users and consumers. The current system allows consumers who fail to uphold debit order obligations to be migrated from AEDO transactions with their permision.

Other complaints relating to unauthorised debit orders saw a number of people take to social media over the festive season to complain unauthorised debit orders. Some cases involved entities that they had never heard of or shared their banking details with.

In such cases, Volker says it is possible that debit order files with banking details could have been illegally obtained from employees at companies authorised to process legitimate debit orders.

See the original article: https://www.moneyweb.co.za/news/industry/early-debit-order-collections-to-get-the-boot/

Source: MoneyWeb Published: 11:30 11-01-2018

Posted by on January 11, 2018.

Categories: Business

« | »


CAPE TOWN WEATHER

Change your weather location

Powered by The Weather Channel

INDICATORS

$ = R0
£ = R0
= R0
Oil = $0
Gold = $0
Updated: 13:55 17-Jan-2018

SEARCH

[Alt-Text]