DebiCheck, a service which will allow consumers to authenticate a new debit order before it is processed for the first time, is coming soon.
According to a report by the Sunday Times, the Payments Association of South Africa (PASA) is “very close” to implementing the solution, with authentication likely to be obtained via SMS.
The move is to protect consumers from rogue debit orders, which are a problem in South Africa.
The system will prevent unauthorised debit orders from being processed without the account holder’s consent, as opposed to canceling an unauthorised debit order once it has gone through – which is currently the case.
The DebiCheck system will also protect banks, with the report stating that more consumers are reversing legitimate debit orders when money becomes tight.
The Sunday Times stated that following the launch of app-based debit order dispute mechanisms by local banks, consumers are flagging debit orders to avoid payments.
The DebiCheck system will allow banks to see which debit orders have been authorised and then spot fake disputes.
A PASA system to only allow authorised debit orders through was set to launch in October 2016, at which point it was already a year behind schedule.
The project was described as one of the “most complex and biggest payment projects” at the time.