Debicheck
(Debicheck)
  • The DebiCheck system to end rogue debit orders has been in the works since 2013.
  • Everyone involved in the South African payments system had been due to implement it by the end of January 2019.
  • But an extension the Reserve Bank just granted means unauthorised debit orders could be around until November 2020.

Rogue debit orders, paid by banks even though customers never authorised them, could now be around until November 2020 after the SA Reserve Bank (SARB) extended deadlines for the DebiCheck system intended to stop such abuse of the national payment system.

Last Friday the Reserve Bank gazetted a technical policy update that effectively gave banks a last-minute reprieve, extending the mandatory implementation date for "AC", or Authenticated Collections, by nine months, from the long established deadline of 31 January 2019 to the end of October 2019.

Various problems with the implementation of DebiCheck had forced a change in timelines, the Reserve Bank told Business Insider South Africa.

The change means banks and others involved in the national payment system (NPS) need not start asking customers to confirm new debit orders before November next year.

In something of a knock-on effect, that means existing debit orders – or new ones loaded into systems before banks turn on DebiCheck – will be honoured until the start of November 2020.

There is some hope that things could move more quickly than that, the SARB said in response to questions on these timelines, though that would be on a "best effort" basis.

Complaints about debit order fraud is a perennial problem in the South African banking system. According to the Payments Association of South Africa (Pasa) most disputed debit orders turn out to be legitimate – but some companies appear to create fraudulent debit orders in the hopes bank clients will never notice. What became known as "the R99 scam" flared up again this year, with an estimated 400,000 people affected.

In 2013 the SARB, which regulates the national payment system, started work towards what is now known as DebiCheck. Under the system banks must confirm every debit order with a customer before deducting money from an account.

DebiCheck went live on the system of South African banks in August, but initial testing has not been perfect with "issues relating to the stabilisation of the system," the SARB told Business Insider SA.

Payment providers also need more time to educate consumers on how to handle authentication requests when they receive phone calls, or alerts on their banking apps, the Reserve Bank says.

But the main issue appears to be outdated telephone numbers.

"Paying banks are experiencing difficulty in reaching customers when their authorisation of mandates is required, this is due to customer details not being kept up to date with their paying banks," the SARB said.

Until the November 2020 sunset clause for current debit orders becomes active, bank customers will have to continue watching out for rogue debit orders and disputing them after they are paid.

Watch the Payments Association of South Africa's video introduction to Debicheck here:

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