introduction to direct debit service
DESCRIPTION
Introduction to Direct Debit Service. EG-ACH Direct Debit. EG-ACH Introduction. The Egyptian Automatic Clearing House (EG-ACH) is a nationwide Electronic Funds Transfer (EFT) network. EG-ACH processes batches of interbank Credit and Debit transactions. - PowerPoint PPT PresentationTRANSCRIPT
Copyright © 2012
Introduction to Direct Debit Service
EG-ACH Direct Debit
Copyright © 2012 Egyptian Banks Company
EG-ACH Introduction
The Egyptian Automatic Clearing House (EG-ACH) is a nationwide Electronic Funds Transfer (EFT) network.
EG-ACH processes batches of interbank Credit and Debit transactions.
EG-ACH facilitates a wide range of Customer to Customer (C2C) payments such as salary distribution, supplier payment, governmental payments, pension distribution and many more.
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CBE - Payment and Settlement Systems
In its effort to develop payment systems in Egypt, CBE has established Real Time Gross Settlement (RTGS) system for large
value payments, CBE has assigned EBC with the development of the Automated Clearing
House (ACH) system for Bulk small value payments.
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RTGS
ACH
CCHEGP
ACHUSD, EURO
Mobile
Central Bank of Egypt
BanksBanks 123
EBC Role
CBE Role
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EG-ACH Direct Debit Service
Payment scheme governed by EBC to facilitates payment collections.
Permits billers to collect recurring amount due from their customers at their banks by initiating direct debit transaction.
Banks are not responsible for any underlying contract between biller and their customers as it is solely an early collection method.
Based on a written authorization given by customers to biller for the debit of their accounts; this written authorization named Direct Debit Mandate.
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Definitions and Interpretation
Debtor (Customer or Payer)
Creditor (Biller or Originator)
Debtor bank (Customer bank)
Creditor bank (Biller bank)
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Direct Debit Workflow
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Creditor Bank Debtor Bank
RTGS Billers
Company
Individual
Creditor
Debtor
Fund Moveme
nt
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Definitions and Interpretation
Mandate Processor: Receives the signed mandate from the debtor, dematerializes the mandate,
archives a scanned copy of the mandate and forwards the electronic mandate information to EBC and send the physical mandate to the debtor bank.
Third Party Processor: Delivers direct debit transactions to EG-ACH on behalf of originator banks.
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What about the Direct Debit Mandate
Direct Debit Mandate (DDM) should be approved by the Debtor Bank prior to direct debit transaction initiation.
EBC has taken the responsibility of providing mandate centralized screening system “Mandate Portal” with following features: Host all direct debit mandates in an electronic form (e-mandate) Screen each direct debit transaction against the respective mandate Allowing the debtor bank to activate/deactivate particular mandate
Mandate Portal: A central hub for mandate business workflow which facilitates collecting and
routing the dematerialized Mandates between the different parties
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Direct Debit Mandate Types
Irrevocable Mandate Irrevocable transactions Payment frequency as per contract terms and conditions Could be canceled based on mutual agreement between Debtor and Creditor
Revocable Mandate Revocable transactions Payment frequency is required (Monthly, Quarterly, Semi-Annual, Annual) Could be canceled upon Debtor request
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EG-ACH Direct Debit - Mandate Form - Irrevocable v3.3.pdf
EG-ACH Direct Debit - Mandate Form - Revocable v3.3.pdf
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Direct Debit Mandate Initiation
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Mandate Portal
MandateProcessor
Payer
Biller
Courier
Debtor Bank
Fill Mandate
Acti
vate
ACK.
Send DeliverPhysical Mandate
Dematerializ
e
Arc
hi
ve
Packi
ng
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Direct Debit Workflow & Screening
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Creditor Bank Debtor Bank
RTGS
Billers Corporate
Individual
Creditor
Debtor
Fund Moveme
nt
Mandate Portal
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Direct Debit Participants
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EBC
Scheme Owner and Operator
Mandate Portal Provider
Third Party Processor
Work on behalf the banks
Send DD transactions
Receive DD transactions
Mandate Processor
Collect mandates
Dematerialize mandates
Archive mandates
DD transaction initiator
Host creditor account
Debtor Bank
Host debtor account
Activate Mandate
Screening
Send mandates to debtor bank
Clearing and Settlement
Creditor Bank
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Direct Debit Participants
EBC The scheme owner; defines the rules for the use and certifies parties
participating in the scheme (banks mandate processor and third party processors)
The clearing house Mandate Portal The mandates are checked every time a direct debit is done
Debtor Bank Will debit the account of the debtor when an accepted direct debit occurs
Debtor A debtor is the party whose bank account is to be debited as instructed in a
DDM, typically a customer of a biller. The debtor is able to revoke a direct debit transaction within 180 days after
settlement date for bill payment only, revocation is not applicable for any installment payment.
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Direct Debit Participants (Cont.)
Creditor Bank Will credit the account of the Creditor when a direct debit is accepted and
settled by the clearing house The Creditor bank is liable towards the scheme owner for any revoked
transaction. The Creditor bank has a direct debit contract with the biller
Creditor A biller with a direct debit contract can send a direct debit file to the
creditor bank The Creditor receives from Mandate Processor the mandates which are
accepted by debtor bank The Creditor is liable towards the Creditor bank
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