The system that will stop illegal debit orders in South Africa

The Power Report has detailed how Pasa plans to put an end to fraudulent debit orders in the country.

By - February 7, 2016 Share on LinkedIn
Mobile banking

The Payments Association of South Africa (Pasa) and the Reserve Bank will launch the Authenticated Collections Project in October, which will see only debit orders authorised by consumers be processed by banks.

According to the Power Report in the Sunday Times, the project is one of the “most complex and biggest payment projects” ever undertaken, and will require bank customers to provide “explicit authentication” before their account can be debited.

The project is a year behind schedule, but should provide relief for thousands of South Africans who have their accounts debited without their permission by unscrupulous companies on a monthly basis.

“Last year alone, Pasa shut down 150 small call centres, mainly in Durban, from which dodgy debits were emanating. Unfortunately, these outfits tend to pop up again under new names,” stated the report.

How it will work

“This mandatory authentication will be done in various ways – including in person through a card swipe or through an SMS request from the bank,” stated the report.

Only early debits, known as non-authenticated debit orders, will be affected initially.

“It will eventually roll out to all types of debits, including long-term debit orders.”

The debit order project will come as a relief to consumers who have had money taken off their accounts without their permission, and who were told by banks that it is their responsibility to ensure debit order fraud does not occur on their accounts.

According to a November 2015 report, nearly one million debit order disputes are lodged in SA every month.

The full report is available in the Sunday Times – 7 February 2016 edition.

More banking news

South African online shopping payment problems

Standard Bank system downtime on Sunday

Share your thoughts

Join the conversation

Connect with Us

androidappletwitterfacebookgoogleplusfeednewsletter

Poll

Which online social platform is your favourite?

View Results

Loading ... Loading ...

More News

New trick criminals use to steal your One-Time PIN

One Time Pin on phone

Through social engineering attacks, criminals are convincing South Africans to hand over their one-time PINs – which can cost them thousands of rand.

2016 MyBroadband Cloud and Hosting Conference in photos

Cloud and Hosting Conference

The 2016 Cloud and Hosting Conference attracted a record number of delegates, and provided a platform for IT executives and managers to interact with cloud and hosting providers.

Uber to review South African price cuts

Uber logo city

Internet ride-sharing app Uber will decide on June 6 if it will keep its winter price cuts or hike fares again.

Xiaomi Mi 5 launched in South Africa

Xiaomi Mi 5

Mobile in Africa group has launched Xiaomi’s flagship smartphone in South Africa.

X

Newsletter Subscription


Name
Email *
Enter the following to confirm your subscription *
Captcha image


Free MyBroadband Newsletter
Subscribe
×