COVID-19 Delays Scrapping of Mysterious R99 Debit Orders

The now infamous R99 debit orders in 2019 resulted in as much as R1.6 billion being fraudulently debited from the bank accounts of ordinary South Africans.

brown leather bifold wallet on table
brown leather bifold wallet on table. Photo by Two Paddles Axe and Leatherwork on Unsplash

A payments project, which makes it harder for crooks to load fraudulent debit orders and harder for consumers to query debit orders on their bank accounts, has been delayed.

The mysterious R99 debit orders that many people have complained about could now be around until May 2021.

The South African Reserve Bank (SARB) has today published (in the government’s Gazette) a new date for when the payments project – DebiCheck (also known as Authenticated Collections) – will be operational.

This simply means banks will continue to pay “rogue debit orders” that customers did not authorise.

The system, which aims to end rogue debit orders, was supposed to become operational next month.

However, South Africa’s efforts to tackle the deadly COVID-19 pandemic has altered the plan.

In order to curb the spread of COVID-19, the country imposed a 21-day lockdown that has since been extended by two weeks to the end of April.

In the gazette, SARS states that due to the lockdown and to “minimise risk to the ecosystem of the collection,” certain timelines regarding the introduction of DebiCheck need to be extended.

The gazette also said no new debit orders could be added until May 2021, and those orders could be honoured before the sunset date of 31 October 2021.

“Participants involved in the collection of payment instructions in the EDO environment are directed to: not allow any new, extended or re-negotiated AEDO or NAEDO collection agreements to be concluded from 1 May 2021,” reads the gazette in part.

The now infamous R99 debit orders in 2019 resulted in as much as R1.6 billion being fraudulently debited from the bank accounts of ordinary South Africans.

Banks in South Africa process about 56 million debit orders a month.

Close to a million inter-bank debit orders, including non-authenticated early debit orders, are disputed every month, according to the Payments Association of South Africa (PASA).

The dispute ratio for non-authenticated debit orders is between 4.5% and 6%. Some of these include debit order fraud, says PASA.

Leave a Reply