While businesses want to ensure that they don’t miss a payment from a customer, customers equally want to be certain that fraudulent debit orders aren’t coming off their bank accounts – think the R99 scam that’s been prevalent for the past few years.

Debit order abuse goes way beyond rejected payments – and while technology has a role to play in ensuring that debit orders are honoured, so does consumer education, says Vaugh Hechter, Client Services Head at NuPay.

Debit order failure is caused by a variety of factors.

First and foremost, says Hechter, there are debit orders that are processed through consumers’ bank accounts without the explicit consent of the accountholder. This is where the so-called R99 debit orders come into play, initiated by unscrupulous transaction processors. However, this is also the domain of debt collectors, who submit debit orders with permission from the accountholder.

Vaughn Hechter, Client Services Head, NuPay

A key takeaway here, says Hechter, is that the accountholder needs to be given the ability to authenticate transactions against his or her account before they can be processed, reducing the likelihood of fraudulent debit orders.

Keith Wrede, Deputy Managing Director of Altron Fintech/NuPay, outlines the main players in any debit order process: “There’s the debtor, the creditor, the bank and sometimes a system operator. The debtor is the person whose account is debited. The creditor is the person who receives the funds and who initiates the debit order into the system. The bank is the consumer’s financial institution. System operators are responsible for processing transactions on behalf of creditors to debtors to the various banks.”

Keith Wrede, Deputy MD, NuPay

Creditors push transactions into the system, usually via a system operator, although sometimes they go directly through the bank. “The R99 and other debit order scams are unscrupulous fraud,” says Wrede, “There’s no other way to describe these actions.”

While businesses want to ensure that they don’t miss a payment from a customer, customers equally want to be certain that fraudulent debit orders aren’t coming off their bank accounts – think the R99 scam that’s been prevalent for the past few years.

Debit order abuse goes way beyond rejected payments – and while technology has a role to play in ensuring that debit orders are honoured, so does consumer education, says Vaugh Hechter, Client Services Head at NuPay.

Debit order failure is caused by a variety of factors.