Authenticated Collections is the process whereby consumers will electronically confirm to their bank that you are in the process of doing business with a company/user and that you agree to the details of the specific Debit Order. Once you have authenticated your Debit Order, the bank will check the Debit Order payment instruction from the company/user against your authenticated mandate to ensure that the debit is within the parameters you agreed to, prior to processing. At this stage, this process will only be implemented for Early Debit Orders, and not for normal Debit Orders. This means that from a certain date, only Authenticated Debit Orders will be processed in the Early Processing Window and all other Debit Orders later in the day. The Authenticated Collections project introduces new criteria for collecting money in the Early Processing Window.
“Authenticating all Early Debit Orders is a means to protect consumers from unscrupulous companies who attempt to debit consumers’ bank accounts without their permission,” says Volker. “As a result, consumers will know who is debiting their bank account, when they will debit and how much will be debited. At the same time, this new system will also protect Companies in that authenticated mandates will not be easily disputable by consumers.”
Some typical examples of how an electronic authentication might be achieved include an SMS or USSD request from the account holder’s bank - which is then confirmed by the consumer, or a card and PIN authentication within a store.
