In an effort to modernise the payment system, the South African Reserve Bank (SARB) has announced that it will implement AC/DebiCheck payment system from 1 May.
SARB said the aim of the project was to address the increasing levels of abuse in the debit order payment system known commercially as the early debit order (EDO) payment system.
SARB said: “From May 1, 2021, all new and renegotiated EDO mandates will be originated in the AC/DebiCheck payment system and not in the current EDO payment system.
“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.”
The central bank said the EDO system allowed consumers to instruct a company or user to collect money from their bank account.
SARB said the new AC/DebiCheck payment system consumers would provide authorisation to their bank to release funds from their accounts when a debit order was submitted by a company or user with whom they conducted business.
The AC/DebiCheck payment system was first implemented on August 1, 2018, and has been going through various stages and processes of testing and integration.
“Companies or users of the EDO system had until November 1, 2019, to fully implement the AC/DebiCheck payment system. Since the implementation date, companies or users have been requested to begin using the system for all EDO collections,” it said.
“Owing to the complex nature of the AC/DebiCheck system, a lengthy ramp-up period was required to ensure that all stakeholders in the EDO collections ecosystem had implemented and tested their internal processes and interfaces to the AC/DebiCheck payment system,” the SARB said.
SARB added that the AC/DebiCheck project was an initiative of the collections industry that ensured the safety and efficiency of the national payment system, and the mitigation of rogue and fraudulent behaviour in the collections system.