Debit Orders and Stop Orders. Know the difference

How Debit Orders work 

• To understand what a debit order is, think of it as a payment method where a company deducts a pre-agreed amount from your bank account on a specific date, using a third-party processor like Netcash. Only the service provider can cancel the debit order – not the customer.
• The third-party uses a bank or third-party processor to deduct the agreed amount of money from the account holder’s bank account.
• Only the third-party or the company with which the customer has signed the agreement has permission to cancel the debit order.

What are the benefits of Debit Orders?

Increases cash flow

Control over debit orders means you improve your cash flow. Getting paid on time means your cash flow will be automatically more consistent. A positive cash flow results in not needing to worry about putting any business plans and operations on hold; you can just focus on growing your business.

Safe and convenient

Unlike a stop order, which is set up directly with the bank, a debit order ensures businesses receive payments automatically without the customer needing to initiate them. Customers do not need to remember to make manual transfers. Funds are automatically deducted from their bank accounts, which is great for recurring payments and ensures you are paid on time.

A comprehensive payment report is available to track who has paid you and analyse your debit order collection success rates.

Ensures payments are made on time

Since debit order payments are automatic, they will always be made on time. Customers will not need to remember to make payments or be concerned about missing payments. It decreases the likelihood of missed or skipped payments, and payments will be received on the same day every month.

For debit orders to be successful, customers need to ensure sufficient funds are available in the account every month.

DebiCheck Debit Orders

To further understand how a debit order works securely, the industry introduced DebiCheck to prevent unauthorised transactions.

A DebiCheck debit order system requires explicit electronic consent from the bank account holder via their bank prior to any debit order being processed.

You can debit a bank account confidently as the likelihood of transactions being disputed is drastically reduced. Bank account holders have the comfort of knowing that the debit order can only be processed on the terms as agreed by them.

Debit orders are a simple and efficient way to assist you in keeping up to date with your monthly repayments.

Learn more about how debit orders can save you time.

Stop Order vs Debit Order – Key Differences

If you’re not sure about the difference between a stop order and debit order, here’s a simple comparison to help you decide which suits your needs.

Frequently Asked Questions

About Netcash

Established in 2003, Netcash is a payment solutions provider delivering debit orders, salary and creditor payments, Pay Now, eCommerce, and risk report services to South African businesses and organisations. The company provides multiple innovative and integrated online payment solutions that are efficient, simple, and cost efficient. Netcash is registered with the FSCA, PASA and is PCI DSS Level 1 compliant.

www.netcash.co.za

A debit order is an efficient way to collect recurring payments where revenue is dependent on customers making monthly payments. Instead of manually doing so, these are automated, taking the effort out of paying.

Netcash acts as a transparent middleman between your company and the individuals from whom you wish to collect recurring payments for services or products. Whether you’re a new up-and-coming business or an established entity, a well-regulated debit order service provider is essential to reduce customers’ debit order disputes.

Are you unsure how debit order disputes work and what exactly you’re entitled to when this issue arises? We’ll guide you through the nitty-gritty of this recurring payment commitment and the inner workings of the debit order dispute.

What is a debit order dispute?

Before diving into the meaning of a debit order dispute, it’s crucial to understand what qualifies as one.

A debit order is an agreed-upon and authorised request for a specified amount of money to be withdrawn from your customer’s bank account; commonly, a monthly payment that seldom doesn’t change outside of annual price increases.

This agreement can be a contract, but the individual’s bank will need a mandate. Although the bounds of these mandates can differ, they are usually determined by frequency and amount.

If a customer encounters a deducted amount that is outside the bounds of your agreement with the third party, they can contest and request a debit order dispute. If the bank approves a debit order dispute, your company is liable to pay the customer back the amount disputed.

The importance of following PASA rules

This is why following Payment Association of South Africa (PASA) debit order rules is essential to protect your company from disputes and ensure compliance. PASA is generally seen as the debit order law South Africa follows and is the payment system management body.

Netcash has various security measures in place to minimise the risk of debit order fraud. If the customer chooses to report a debit order dispute at the bank, the debit order will be investigated to ensure its validity.

This is where your company will be requested to provide evidence of the debit order mandate to be absolved from the specified dispute. If you have the necessary paperwork and information to supply the bank, you’ll more than likely not be liable for any payouts to customers. This refers to documents such as valid voice, electronic, or paper mandates.

Can a customer cancel their debit order agreement?

As a company or third-party entity, you are responsible for adhering to the guidelines and terms of conditions provided.

Be sure, in your customer’s debit order agreement or mandate, that you have the right to cancel their financial responsibility at any time. In that case, you’ll have the legal right to proceed with their debit order cancellation.

If a customer has requested to cancel the debit order in writing and is in compliance with your debit order contract requirements, it’s in your best interest to stop the recurring transaction.

Otherwise, customers may involve their given bank or Netcash in order to absolve them from their debit order, which provides a bad reputation for your business.

Disputed debit order | Netcash policy

It’s important to note that not all instances of deemed disputes regarding debit orders can be processed and resolved through a payment resolution. There are many requirements that need to be in place in order to receive and process a debit order dispute:

• Suppose there was an error in the amount that your company requested from the client for payment. This would generally occur for several reasons, such as human error in checking the correct client information and agreed-upon amount.
• Customers may also file a dispute if they believe the deduction was an unauthorised debit order or if the reference is unclear. This could be due to a lack of research and education regarding the debit order’s terms and conditions (including the possibility of a different reference name on their account).
• If customers fail to realise or are made aware of any annual increase in transactions, they could be more likely to dispute a debit order.

Customers use debit order disputes to report that they believe the transaction is outside the agreement. So, it’s crucial to use the bank approved mandate that has been provided, as this will be the only approved mandate that will hold up under any scrutiny by the bank that explicitly stipulates what the customer agrees to be debited for.

Businesses must also manage their mandates properly. While keeping paper mandates is possible, it is risky. They could get lost or damaged over time, making digital mandates the best way forward.

Embracing Netcash and an approved ISV makes uploading mandates to a debit order management system easier than ever. This allows businesses to send out virtual mandates or mandates without having to worry about data safety. Incorporating such a system is also a fantastic way to record and recall mandates.

The policy of Netcash, in terms of legality and debit order service terms, stipulates a variety of requirements to conduct business. By adhering to these terms, your customer will have less likelihood of receiving a debit order refund through a dispute (which means less time and unnecessary back payments spent). These terms include:

• No potentially fraudulent third-party interference when sending instructions and customer details to Netcash.
• A debit order mandate from your customer on the bank-approved mandate.
• Inform the customer that their personal account might reflect a deduction from Netcash and the name of your company on their bank statement. It remains your responsibility to educate your clients on what to expect.
• Reporting any issues with Netcash instruction at least two days before any specific transaction is supposed to occur.

How to dispute a debit order

To dispute a debit order, customers should first verify that the transaction falls outside their agreement. If it does, they can contact their bank with a formal request. Be prepared to supply the necessary mandate or agreement details. Using a system like Netcash makes tracking these mandates easier and strengthens your case in the event of a dispute.

Frequently asked questions – disputed debit order

As there is a wide variety of factors that can affect debit orders and disputes, it can be challenging to keep your head above water. Let’s take a look at a few common queries in order to understand debit order disputes and other related finance questions better:

Debit order vs. stop order?

Debit and stop orders are entirely different entities and require distinctive authorisation by a specific third party. A stop order in banking is an instruction to allow payments to reoccur on an agreed-upon basis between you and your bank.

A debit order is an agreement mandating that your company retrieve a predetermined amount from the customer’s bank account.

What can a business do to prevent debit order disputes further?

It’s vital for companies to keep track of customer debit order cancellation requests to reduce actionable debit order disputes. This way, you’ll be able to cancel debit orders before transactions occur without any bank involvement.

This will also create a positive and hassle-free cancellation process for your customers, which generates a pleasant customer experience from doing business. Also, this shows the legitimacy of your business and hopefully ensures positive reviews.

If a customer can prove to their bank that they have requested a mandate cancellation from your business (that complies with your terms and conditions), they can issue a dispute.

As the sun rises on a new day, the South African solar industry’s revolution continues pushing forward. In the continent’s push for accessible and sustainable energy, it’s time to analyse innovations shaping the future of the South African solar industry.  

With solar solutions emerging as an increasingly vital part of our world today, traditional sources continue to prove unreliable.   

The solar power industry has shown to be one of the most viable alternative energy sources locally, with record-breaking numbers in recent years. But what’s behind this driving force, and what hurdles remain?   

With a positive outlook and a growing solar market, let’s examine the industry, its challenges, and how to stay ahead of the curve. 

Read next: Digital payment processing. 

What’s standing in the way of the South African solar industry? 

As the solar industry in South Africa is proving to be the light at the end of loadshedding, it still faces challenges. Alongside these potential problems, there is also a buffet of solutions to innovate the sector.  

Battling an increase in initial costs 

Despite decreasing overall costs, high initial costs in South Africa are the first obstacle to businesses’ and individuals’ adoption of solar energy. This widespread barrier stems from the fact that South Africans simply do not have the funds to afford skyrocketing setup costs. 

This represents a problem where initial installation costs are out of reach, and long-term savings are almost impossible to imagine. Solar suppliers must balance high quality and profit gain as the sector expands. 

As more people and businesses are forced to turn to solar alternatives, the need for versatile payment systems and solutions is greater than ever.  

Subscription model payments, which include debit orders and recurring billing backed by trusted payment providers, are at the forefront of these solutions. By offering these, solar providers position themselves to improve accessibility to solar power for individuals and businesses.  

Rising competition from other energy sources 

While the industry is thriving, its success hangs on a precariously thin thread, and solar suppliers must strengthen their ability to withstand competing energy sources. Fluctuations in fossil fuel prices and investment in other renewable energy sources pose the greatest threat to this. 

Collaboration is key in this regard, and a strong, competitive solar industry must be fostered to succeed. From raw material suppliers to manufacturers and installers, a harmonious industry can endure. 

That said, this relies on mutual monetary benefit. Solar suppliers have to engage with other key players in the industry and create favourable relationships. With resources in high demand, on-time creditor payments are the ideal foundation for establishing lasting industry relationships. 

Technicalities with grid integration and infrastructure 

Another hurdle is ageing infrastructure and grid integration. Years of mismanagement and lack of maintenance make integrating intermittent solar energy into the existing power grid significantly more difficult. 

Without massive upgrades to accommodate small- and large-scale solar integration, the industry will be throttled, and growth will suffer. This necessitates lasting collaboration between solar companies, utilities, and the government to modernise the grid infrastructure. 

As a result, this collaborative effort can ensure smooth energy integration, improved grid stability, and enhanced overall system resilience. Beyond these, these strategic partnerships can facilitate knowledge sharing, resource pooling, and risk mitigation, benefitting the entire industry. 

Maintaining skilled and valuable staff 

The successful adoption and implementation of solar and solar energy companies in South Africa requires a skilled workforce. The backbone of this workforce is employees with technical expertise who are valued, respected, and paid on time. 

Solar suppliers must integrate salary payment systems that keep staff happy. Considering the high price tag that comes with solar equipment, unrest among your employees can lead to escalating issues, such as internal theft.  

As the industry emerges from its infancy, internal disputes and disruptions pose a real threat, one that solar suppliers should avoid. 

Another aspect to keep in mind is the potential disappointment of staff should solar suppliers not offer training opportunities. Human error with payroll disbursement plays a prominent role in hurdles that could have been avoided in the administration of your business.  

Contactless payments have become a standard option with most retailers in the last few years. What’s more, phones have essentially become an extra limb – one that people hardly ever leave home without. 

With this in mind, many businesses have added scan to pay and QR codes as an accessible and quick way to complete transactions. But do you know all the security and privacy benefits of scan to pay contactless payments? 

This guide will cover all the top advantages of using scan to pay QR codes for contactless payments. We’ll also get into some useful info about these methods and even how to set them up.

What is scan to pay and why should you use it?

Scan to pay is a simplistic, swift, and secure way of making payments by quickly scanning a QR code using your smartphone’s camera. Quick Response (QR) codes are a type of barcode that can be read by a variety of devices to access payment channels, Wi-Fi networks, and informational pages. 

As a form of contactless payment, scan to pay helps to reduce physical contact between the consumer and business employees. This made it hugely popular during the COVID-19 pandemic, as many people wanted to minimise touching possibly infected objects. Since then, many businesses have seen the benefits of using it.

This payment method also works exceptionally well with certain types of businesses, as it’s paperless, doesn’t require expensive POS systems, while making brands seem more future-forward.

How secure are scan to pay QR code payments?

Using scan to pay and QR codes is a secure method of retail payment. That’s because it does not require contact with the payment terminal – reducing the chances of skimming, tampering, or cloning. 

It also does not transmit sensitive data, like your card numbers and personal details, which helps to minimise risks like hacking, spoofing, or interception. 

That said, contactless payments are not without downsides. This technology is highly dependent on the customer’s smartphone security, which could be compromised by malware, theft, or phishing. Additionally, QR codes could be duplicated, manipulated, or replaced by fraudsters looking to take advantage of small businesses.

How to make scan to pay more secure for your business?

To make contactless payments more secure, there are several safety procedures you can put in place. These range from using custom QR codes to encrypting your business’s website. 

Here is what we recommend: 

• SSL-certify your website: A Secure Sockets Layer (SSL) certificate proves to your customers that their information is safe and shields them against hackers trying to create a fake site. This works in your best interest, as your consumers will feel secure using your online business.
• Use an SSO-enabled QR code generator: Utilising a generator with a single-sign-on (SSO) login will help to limit who is able to edit the code. In fact, only your business will be able to access the code management platform.
• Invest in a GDPR- and POPIA-compliant QR code generator: If your code generator complies with the General Data Protection Regulation (GDPR), it will protect your and your customer’s data from hackers or third parties. 
• Using custom QR codes: By making use of custom QR codes, not only can you help develop your brand’s image, but you can also safeguard your customer’s data. With unique code templates, it’s harder for scammers to modify them and exploit you.

Why are scan to pay and contactless payments beneficial for your customers?

We’ve gone over the benefits of why scan to pay and contactless payments are beneficial for the security of your business, but you might be asking how will my customer take this process? Well, besides the fact that contactless payment is such a commonly used transaction method today, it also has several crucial benefits for your consumer. 

• Faster payments: The typical paying process at restaurants, bars, and retailers can often be quite slow, especially at peak business hours. Using QR codes and scan to pay can save time for both the consumer and the merchant, as all they need to do is scan the code, pay for the service/product, and a notification pings when the transaction is successful.

• Safer transactions: Through dynamic data processes and encryption, contactless payments and scan to pay are more reliable and secure than older forms of payment. In addition, these methods are better equipped against fraud and scams.

•  Better flexibility and convenience: With scan to pay and contactless payment, the customer no longer has to worry if they’re carrying enough cash. They simply have to pay by phone, after authorising the payment through a pass code, biometric feature, or two-factor authentication. 

Privacy benefits of using scan to pay for contactless payments

Scan to pay can also be hugely advantageous for your business. However, consumers worry about their private data being compromised. That doesn’t have to be an issue, though, as contactless payments do have safeguards against that. Here are the top privacy benefits of using scan to pay for contactless payments. 

Scan to pay does not collect personal information

Let’s dispel the myth: using scan to pay with QR codes does not collect personally identifiable information like your name, address, and birthdate. Instead, it collects information specific to it, such as the number of times the code has been scanned, the operating systems of devices that have scanned the codes, and when the code was scanned. 

QR codes don’t live track you

Another mistruth about QR codes is that they can be used to track your location. Well, this is simply not true. When someone scans a QR code, the data is only collected there and then. And as mentioned in the previous point, it is only information about the QR code. 

QR code generators cannot obtain any of your personally identifiable information, and therefore, they cannot track where you are. The data is collected similarly to that of a photo – and will only be recorded at the moment when the code is scanned.

Drawbacks of using scan to pay for contactless payments

Sadly, scan to pay does not come without its disadvantages, so it wouldn’t be fair if this guide didn’t address them. From possible inaccessibility issues to less control for the merchant, here are the top drawbacks of using scan to pay.

Not accessible to everyone

The truth is that even today, in the Information Age, not everyone has smartphones. QR codes require smartphones with software advanced enough to scan them. Some users might be unfamiliar with scan to pay or simply prefer more widely-accepted options. 

Requires internet connection

QR codes also need Wi-Fi or mobile network access to work. If, as mentioned above, users have older smartphones or more rudimentary cell phones, they won’t be able to pay using the QR code. This can be where contactless cards come in handy – and it goes without saying that having multiple payment channels is best. 

User distrust and unfamiliarity

If your main customer base prefers paying with cash and cards, a big change like using QR codes might cause distrust in your business. This is especially true if they’re unfamiliar with scan to pay technology. 

This is definitely something to consider when setting up scan to pay at your business – and it could be a big risk. 

Frequently asked questions | Scan to pay for contactless payments

Even though this guide has given quite a thorough look into scan to pay methods, you may still be looking to answer some burning queries. We’ve collected some of the most commonly asked questions about scan to pay for contactless payments and responded to them below.

What scan to pay options are there in South Africa?

South African businesses and companies have taken scan to pay by storm in the last few years. Snapscan and Zapper were among the first mobile payment providers, but now all major banks offer scan to pay on their mobile apps. This includes Nedbank, FNB, Capitec, RMB, Standard Bank, and Absa. 

Moreover, even mobile network providers, like Vodacom and Telkom, offer scan to pay through the Vodapay and TelkomPay apps, respectively. Heck, even Engen has released the Engine1 app for paying via QR code, which they also use to market special offers at their 1Shops and to foster customer loyalty.

Why should your business go contactless? 

Besides just the convenience of using contactless systems for your business, it’s also becoming a way of modernising your business and attracting more people to your service.

Most contactless payments don’t have any additional processing fees, saving you extra money to spend on renovations, improving your products, and maximising customer experience. It also offers a more hygienic way of making payments, which helps both you and your customer.

Why should I use Netcash’s scan to pay process?

The answer to this is simple: efficiency. Not only is the setup simple and hassle-free, but Netcash also has a mobile app, billing options, and physical methods to receive payments with QR codes. Other benefits include:

• It’s cheaper and faster access to your merchant facility.
• The exact amount can be displayed on the customer’s payment app, without the customer having to type it in, which creates a more frictionless experience.
• Each QR code contains unique data, so other useful information can be recorded, like where the transaction is taking place.
• No need to deal with the onerous compliance requirements that come with storing cardholder data.
• Netcash also provides static QR code countertop stands as a backup in the case of power outages or systems being offline.
• Digital wallet users do not expose their cards to skimmers thereby eliminating fraud.

Additionally, Netcash’s QR codes work with all major banks and service providers in South Africa, such as: 

• Capitec
• Nedbank
• First National Bank (FNB)
• Rand Merchant Bank (RMB)
• Absa
• Standard Bank
• Telkom
• Vodacom
• Zapper
• QR Junction
• Spot