DebiCheck gets the balance right between businesses and consumers

Steven Maier, Chief Brand Officer at Amplifin

South Africa’s payments and collections ecosystem has long carried tension on both sides of the transaction. Businesses need predictability and enforceable consent to operate sustainably, while consumers need protection against unauthorised debit orders. For years, weaknesses in the system allowed poor practices to develop on both sides, some businesses collected without sufficient transparency, while some consumers exploited reversal mechanisms even when collections were legitimate.

“If you work in collections or recurring payments, you know the pain on both sides,” says Steven Maier, Chief Brand Officer at Amplifin. “Some businesses used to push debit orders without clear consent, while some consumers learned to game the system to reverse legitimate collections and more specifically use disputes and reversal of these legitimate collections for cash-flow management purposes.”  DebiCheck was introduced to address this imbalance. By requiring once-off authentication from the Payer before collections are presented, it fundamentally changed how consent is established and enforced.

At its core, DebiCheck allows the consumer to confirm the debit order details with their bank at the start of the contractual relationship. The bank then retains the mandate record and validates each collection against the approved terms and parameters of the authenticated mandate housed in the mandate register of their bank. If the value of the collection falls outside what was authorised, the collection is rejected. If it matches, the collection proceeds with a clear audit trail.

“The bank effectively becomes the referee,” says Maier. “It holds the mandate and checks every collection against what was actually approved when authentication took place.”

DebiCheck did not emerge in isolation. Its introduction forms part of the broader modernisation of South Africa’s national payment system guided by the South African Reserve Bank’s Strategy 2030 agenda which encompasses the Payments Ecosystem Modernisation (PEM) Programme. “The policy direction is clear,” Maier notes. “We are building a payments environment that is faster, more inclusive and far more secure with strong authentication at its core.”  

This shift also explains the removal of non-authenticated early debit orders from the early processing window. AEDO and NAEDO were sunset on 31 October 2021, closing the door on collection methods that created excessive room for abuse, disputes, and uncertainty.

So how does DebiCheck balance rights in practice?

For consumers, the benefit is straightforward. The mandate is visible, explicit and approved through a trusted bank channel before any collections take place.

This is why banks position DebiCheck as a mechanism that limits disputes where collections match the approved mandate.

For businesses, the value proposition is not price-driven. DebiCheck typically costs more than standard EFT debit orders because of the added authentication. Industry sources are open about this. The trade-off is that authenticated mandates are processed early in the morning which is typically close to when salary credits occur and have advanced functionality like Credit Tracking allowing multiple presentments until either a successful collection is possible or the number of Credit Tracking days lapse, but also and very importantly the reduction in successful disputes and reversals on legitimate collections.

Authentication also gives businesses the flexibility to obtain customer consent in a way that best suits their operational needs and their customers’ preferences. DebiCheck supports both face-to-face and non-face-to-face authentication environments, with a range of secure options available, including USSD, banking apps, card and PIN, and in-bank authentication, to name a few.

These models let businesses match authentication to the use case, whether that is a call centre workflow, batch onboarding, or an in-store contract.

“There is an important nuance for businesses. You do not need to move every customer onto DebiCheck. The key is to match the collection rail to the specific use case.

Registered Mandate (RM) remains a strong option for lower-risk, reliable consumers and businesses. With RM, a mandate is formally registered, providing greater security and transparency. Users also benefit from real-time status updates, allowing them to track exactly where a collection is in its lifecycle.

In other words, the decision should be driven by risk management and the level of certainty required, ensuring the right collection solution is used for the right customer, at the right time.

Delivering the growth needed

DebiCheck should be viewed as an enabler of sustainable growth rather than a compliance burden. Maier adds, “DebiCheck gives businesses a mechanism to prove authority, align each debit with the approved mandate, and reduce the cost and disruption of disputes over valid collections. It also builds trust. Customers can see that you only collect what was agreed. That is how the system should work.”

“At Amplifin, we help clients choose the right mix. Use DebiCheck to protect revenue and reduce downstream noise with authentication and predictability. While traditional EFT debit orders have historically been widely used, Registered Mandate (RM) is increasingly becoming the future of lower-risk collections. RM provides a formally registered mandate, greater security, and real-time visibility into the status of each collection.

From a pricing perspective, successful RM collections are very closely aligned to EFT debit orders, with the only additional cost being the once-off mandate registration and optional credit tracking for those who choose to make use of this service.

RM is well suited to business and juristic accounts (business accounts), or collections where timing is less critical but enhanced visibility and control remain important. Design your flows so that authentication is easy to give and simple to confirm.

“That is the balance I believe in. Consumers get protection and businesses get certainty. Everyone benefits from fewer disputes and a record of what was actually approved.”

In conclusion, the decision as to which collection solution to make use of should be driven by risk management and the level of certainty required, ensuring the right collection solution is used for the right customer, at the right time.