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.
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.
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.
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.
DebiCheck offers a unique bouquet that aims to: