South Africa’s payments businesses await the mandatory shift from the Registered Mandate Service (RMS) to the new (RM) payment stream by March 2025. With the change imminent, Amplifin’s Chief Brand Officer, Steven Maier, shares insights on how businesses can navigate this shift effectively.

As the South African payments community prepares for a significant shift, businesses reliant on DebiCheck debit orders – and specifically in cases when authentication from debtors is not successful – must brace themselves for the mandatory transition from the Registered Mandate Service (RMS) to the new Registered Mandate (RM) payment stream by the end of March 2025.

This shift goes beyond compliance. It represents a broader drive toward modernising payment infrastructure, aligning with international standards and securing the financial system. Understanding and preparing for the change is crucial for companies relying heavily on RMS collections.

A primer on the evolving landscape

The shift from RMS to RM is part of the South African Reserve Bank's (SARB) broader initiative to strengthen the integrity of the country's payment ecosystem. RMS, introduced as a temporary solution, enabled creditors to have their debit orders processed in the morning even when a successful authentication could not be secured from the debtors.

However, RMS, debit orders were disputable by consumers, meaning successful collections could be reversed if the payer raised a dispute. Still, even without an authenticated mandate, creditors generally maintained relatively high success rates. This was primarily due to the time the RMS collections were processed (in the morning).

With RM, however, the SARB aims to phase out non-authenticated debit orders from the early morning processing window, moving them to an evening processing slot. The new RM stream offers limited credit tracking capabilities from noon to midnight. Additionally RM does not require a failed authentication attempt for mandate registration and subsequent processing. As a result, it is imperative that businesses whose success rates are dependent on their debit orders being processed early in the morning enhance their DebiCheck authentication practices to ensure their collections are processed on time.

Why it matters

The transition from RMS to RM presents challenges and opportunities for South African businesses. The move to an evening processing window under RM is expected to impact collection success rates, particularly for businesses that have become heavily reliant on RMS. In many cases, businesses that have substantial RMS collection portfolios will feel the effects most strongly as they typically operate in an environment where payers may not be easily accessible or responsive to authentication requests and are known to withdraw all available funds before debit orders are processed in the evening, which includes RM and EFT Debit Orders.

For businesses with many RMS collections, particularly those with collection portfolios, it is essential to act now. By understanding the scope of their RMS dependency, companies can evaluate the potential impact of their collections having to move to RM, where collections are presented later in the day and are open to disputability. To put this shift into perspective, recent data shows that nationally, an average of 768,702 DebiCheck mandate authentication attempts ultimately end up being presented as RMS collections due to consumers not responding to authentication requests. This volume highlights the significant reliance on RMS and the potential challenges businesses may face in the RM environment.

Practical steps for a smooth transition

With the SARB's deadline approaching, it is crucial for companies to adopt a strategic, multi-step approach to prepare for the shift:

1. Evaluate your RMS dependency: Start by assessing how much of your DebiCheck debit order book relies on RMS collections. Many businesses may be unaware of the extent of their RMS use and how heavily they depend on it for maintaining high collection rates. Extensive investigations need to occur to help ring-fence and quantify these collections, giving companies a clear picture of the adjustments they will need to make.

2. Secure mandate authentication: Once your RMS usage is quantified, focus on obtaining mandate authentication for as many DebiCheck debit orders as possible. By authenticating these mandates, businesses can ensure they continue to benefit from the early morning processing window, which generally results in higher success rates. This process often requires engagement with consumers to reattempt authentication, using all available authentication methods which includes TT1 Real-Time, TT1 Delayed and TT3 Card and PIN, which allow businesses to authenticate mandates while interacting with payers.

3. Assess collection impact through testing: Run small test samples to simulate RM's evening collection timing. Testing EFT debits on known salary dates can provide insights into anticipated success rates when RM debits are processed later in the day. Such an analysis can reveal the impact of shifting collections out of the early morning to the evening processing window, allowing companies to develop strategies that may offset potential losses.

4. Train and equip your call centre teams: If a business makes use of call centre agents, they play a vital role in facilitating mandate authentication and educating consumers. Investing in comprehensive training can help ensure that agents are fully prepared to guide payers through the authentication process effectively. This is particularly important for companies that rely on non-face-to-face interactions for DebiCheck, where clear, accurate guidance to debtor as to how they can successfully authenticate requests is crucial.

5. Adjust sales and service infrastructure: For companies that currently provide goods, services, or credit before mandate authentication, now is the time to review and adjust policies. Under RM, where collections are presented later and are disputable; it may be prudent to hold back on service, goods and funds delivery until mandate authentication is obtained to safeguard collection success rates.

6. Ongoing monitoring and consultation:The transition to RM is not a 'set it and forget it' process. Businesses should continually monitor their RM collections post-transition, ensuring that new mandates are authenticated whenever possible. Regular consultations with payment solution providers can help address emerging issues and refine collection processes.

RM as an opportunity

While the transition brings challenges, it also offers significant benefits. RM marks a step toward modernising South Africa's payment infrastructure by introducing ISO standards, which improve security, data integrity, and operational efficiency. The new system also enables businesses to register mandates for juristic and dual signatory accounts, opening up new avenues for efficient Business to Business (B2B) collections that were previously excluded from DebiCheck.

Additionally, RM's credit tracking capabilities will ensure that bank accounts are monitored on a near real-time or multiple presentment basis from noon until midnight and should sufficient funds be available then the RM collection will successfully be processed, presenting more dynamic collection opportunities.

Additionally, RM, collections are presented in a randomised fashion before EFT presentments, ensuring a fairer opportunity for all beneficiaries to collect. This randomisation prevents the prioritisation of collections based on predetermined schedules, leading to a more equitable processing order for both consumers’ and businesses’ bank accounts.

By embracing RM, businesses can leverage these features to increase collection success rates and streamline processes that were not possible under the conventional EFT debit order system.

The RM payment stream also gives consumers and businesses greater visibility of the RM mandates that have been registered with their bank, which increases overall transparency in the RM payment stream.

The future of debit orders

As the March 2025 deadline approaches, South African businesses must proactively prepare. While the shift from RMS to RM may seem daunting, it ultimately serves as an opportunity to modernise payment systems and enhance security. By following a structured approach to the transition, companies can mitigate potential disruptions and position themselves to thrive in a payments landscape designed for resilience and efficiency.

The coming months offer a chance for businesses to refine their collection processes, improve authentication rates, and align with best practices that protect against disputable collections. In doing so, businesses will prepare for a successful transition and contribute to a more secure, fair, transparent and equitable payment system that benefits all participants in South Africa's evolving financial ecosystem.