Debit orders are such an amazing way to pay for goods or services.
The money just goes off automatically. It’s zero effort
But are debit orders secure?
Sometimes, fraudulent companies process debit orders without the customer’s consent. They deduct unauthorised amounts via traditional debit orders.
That’s a problem, right? Yes, it’s a big one. And that’s why DebiCheck exists today.
Here’s what you need to know.
DebiCheck
DeniCheck is a smart system introduced by the South African Reserve Bank (SARB), the Payments Association of South Africa (PASA), and the banking industry in August 2018.
The idea is to enhance debit order collections’ security and efficiency and protect customers from fraudulent transactions.
DebiCheck seems complicated, but it’s pretty simple.
Let’s start with the basics.
What is a DebiCheck?
DebiCheck is a secure debit order system that gives South African consumers more control over their debit orders. DebiCheck allows consumers to confirm debit orders before banks can process the transactions electronically.
The goal is to prevent unauthorised transactions and fraud.
DebiCheck meaning
The term “DebiCheck” is a portmanteau (a word that is created by blending two or more different words) of “debit” and “check”. It represents a system designed to “check” or confirm debit orders.
Now, if you’re working with a service provider using the DebiCheck system, you may have encountered a DebiCheck mandate.
Let’s explain what the mandate is.
What is a DebiCheck mandate?
A DebiCheck mandate is an agreement a customer provides to their bank to authorise debit orders from a specific company (the ‘user’, ‘creditor’, or ‘service provider’).
DebiCheck mandates list details about the debit order, such as the transaction amount, frequency, and contract length. Consumers can confirm mandates electronically through the DebiCheck system.
Make sense? Perfect.
Let’s go over how the DebiCheck system works.
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How does DebiCheck work?
DebiCheck gives users more control and improves security by adding an additional layer of approval for debit orders.
Here is a step-by-step breakdown of how the DebiCheck system works:
DebiCheck process
Here is a summary of the DebiCheck process:
- Agreement on terms
- DebiCheck mandate creation
- DebiCheck mandate confirmation
- Mandate acceptance
- Processing of debit order
- DebiCheck monitoring
Let’s go over each step in more detail.
Agreement on terms
This is when the customer (you) enters into an agreement with a company (the creditor) for goods or a service that must be paid via debit order.
DebiCheck mandate creation
The company (the creditor) creates a DebiCheck mandate (the digital contract) based on the terms of the agreement.
DebiCheck mandate confirmation
The customer’s bank receives the mandate, and the bank presents the mandate to the customer.
Mandate acceptance
The customer accepts or rejects the DebiCheck mandate (through an electronic banking channel like the app, online banking, or an ATM).
Processing of debit order
The company (the creditor) starts processing the debit orders according to the agreement.
DebiCheck monitoring
The DebiCheck system monitors transactions to protect the customer and ensure that each transaction matches the processed mandate.
So, why the extra effort? Why not use a standard debit order?
Let’s find out.
What is the difference between DebiCheck debit orders and other debit orders?
The difference between traditional debit orders (or non-DebiCheck debit orders) and DebiCheck debit orders is the level of control that the customer has.
Sure, both automatically deduct money from a customer’s account each month, but with a different level of security.
Both DebiCheck and traditional debit orders are mechanisms for automatic payments, but DebiChecks are more secure.
Because DebiChecks empower consumers, debt counsellors often rely on DebiCheck debit orders to process debt repayments during debt review.
📚 Bonus reading: Can I pay my creditors directly while under debt review?
Let’s continue. Next, we’ll go over DebiCheck tracking.
DebiCheck tracking
Debicheck tracking refers to the monitoring and verification process. See step six in the DebiCheck process.
DebiCheck tracking does a few things:
- Mandate confirmation
- Order processing
- Tracking and verification
- Confirmation or rejection
Mandate confirmation
When a customer approves a DebiCheck mandate, this mandate is stored in a central database, and the details are confirmed with the customer’s bank.
Order processing
When the company submits the debit order for processing, the bank retrieves the customer-approved mandate from the central database.
Tracking and verification
The bank then ‘tracks’ or verifies the details of the debit order against the details of the approved mandate. This includes checking elements such as the amount, date, and frequency of the debit.
Confirmation or rejection
If the details match, the debit order is confirmed and processed. If there’s a discrepancy, the debit order is rejected.
Not all DebiChecks are welcome. Occasionally, you might want to cancel a DebiCheck.
DebiChecks must be cancelled by following the correct procedure.
Here’s how to do it.
How to cancel a DebiCheck
To avoid potential issues, it is best to follow the necessary steps to ensure that the DebiCheck is cancelled properly.
How to cancel a DebiCheck:
- Contact the company (the creditor or service provider)
- Contact your bank
- Monitor your account
Here’s what the process looks like in practice.
Contact the company (the creditor or service provider)
Reach out to the company you have the agreement with and inform them that you wish to cancel the debit order.
If there’s an outstanding balance, then you will need to arrange an alternative payment method.
Contact your bank
Once you and the company are in agreement, you can continue and let your bank know that you’re cancelling the DebiCheck. Banks have their own processes in place, so follow the instructions from your bank to cancel the DebiCheck debit order.
Monitor your account
Finally, keep an eye on your account to ensure the debit order is cancelled. If something goes wrong, contact your bank to find out how to resolve the issue.
If all goes well, then you should have no issues at all.
Final thoughts
Now you understand DebiCheck, DebiCheck mandates, and know how the process works, plus how to cancel a DebiCheck.
In essence, it is an agreement that adds some extra security. DebiChecks exist to serve customers (you).
Happy transacting from My Debt Hero.
