Debit Orders

Debit orders are payment instructions directed by a third party to the account of a paying customer of a bank in terms of authority (a mandate) granted by the paying customer to such third party. In more simple terms, it can be described as a facility whereby somebody can collect money from your bank account without you having to do anything other than having given such person a written or recorded voice approval to do so. Debit orders are widely used to collect monthly premiums on life and investment policies, mortgage and hire purchase payments, medical aid subscriptions, magazine and TV subscriptions, etc. It provides the payer with a cheap and very convenient means of making recurring payments.

The collector/beneficiary of the debit order, commonly referred to as a “User” by the banks, must obtain authorisation from the customer to collect the funds from the customer's account through a signed or voice recorded debit order mandate. The mandate given by the customer typically authorises the collections on a specific date, or repeatedly, on a fixed date every month, for a fixed amount or a variable amount with an upper limit or for example increased by 10 percent each year. A “User” is a party who has been approved by a participating/collecting bank and is facilitated by such bank into the EFT Payment System to be able to collect funds, mandated by customers of the Paying Banks.

Paying Banks accept collection instructions to debit their customer’s account that includes the collection information / reference provided by the user. The information normally reflects on the customer’s bank statement to enable the customer to identify the source of the debit. If the customer is not in receipt of regular bank statements, details of the EFT debit transactions may be obtained from the customer’s bank.

Customers are responsible to ensure that the correct account numbers are provided to the User due to banks processing being based on customer account number and not the name or other reference information. The maximum value of a debit order is currently set at an amount of R500 000 (Five Hundred Thousand Rand). Transactions mandated by customers are sent by the User to the Paying Bank via the inter bank operator for collection from the account of the customer. Such transactions are processed overnight by the Paying Banks against the accounts of their customers and unsuccessful transactions are returned to the collecting bank/user the next day.

In the process of clearing, the account of the customer is debited and the account of the collecting User is credited with the transaction amount. The transaction will reflect on the bank statements of the customer along with the reference information provided by the User.

Rules affecting customers

The customer’s right to dispute
The process of dispute
Cancellation of a Debit Order
Stop payment of a debit order prior to it being debited to the account
Customer's responsibility with respect to debit order mandates granted
Resolving problems