RMS to RM: What South African businesses need to know about upcoming debit order changes
The South African payments landscape is undergoing a major transformation as businesses relying on DebiCheck debit orders prepare for the mandatory transition from registered mandate service (RMS) to registered mandate (RM) by the end of March 2025.
This change, driven by the South African Reserve Bank, represents a step toward modernising payment infrastructure, enhancing security and aligning with international standards. Businesses must act now to navigate the transition effectively and maintain collection success rates.
Understanding the RMS to RM transition
RMS enabled creditors to process debit orders in the morning without requiring successful debtor authentication. However, these transactions were disputable, allowing consumers to reverse payments. Despite this, creditors benefited from high success rates due to early-morning processing.
RM, the new payment stream, shifts non-authenticated debit orders to an evening processing slot with limited credit tracking capabilities from noon to midnight. Unlike RMS, RM does not require failed authentication attempts for mandate registration, necessitating a focus on DebiCheck authentication to retain the advantages of early-morning processing.
Why this matters
The transition from RMS to RM poses challenges, particularly for businesses heavily reliant on RMS collections.
Moving to evening processing may: impact collection success rates, as consumers may withdraw funds before RM debit orders are processed; and increase reliance on authenticated mandates to reduce disputability and enhance success rates.
National data highlights the reliance on RMS, with an average of 768 702 DebiCheck authentication attempts ultimately processed via RMS due to consumer inaction. Businesses must address this dependency to mitigate risks under RM.
Practical steps for a smooth transition
Businesses can adopt the following strategies to prepare for the transition:
Evaluate RMS dependency
Assess the extent to which your debit order portfolio relies on RMS collections. Quantify and analyse these transactions to understand potential impacts.
Secure mandate authentication
Focus on authenticating DebiCheck mandates through methods like TT1 Real-Time, TT1 Delayed, and TT3 Card and PIN to ensure early-morning processing advantages.
Test RM’s impact
Conduct test samples simulating RM’s evening processing to gauge success rates. Use EFT debits on salary dates to develop strategies for mitigating potential losses.
Train call centre teams
Equip call centre agents with tools and training to facilitate mandate authentication and educate consumers about the process.
Adjust sales and service policies
For businesses providing goods or services before authentication, consider delaying delivery until mandates are secured to safeguard collections.
Monitor and consult
Continuously track RM collections and consult payment solution providers to address challenges and refine processes.
Opportunities with RM
Despite the challenges, RM offers significant benefits:
- Modernisation: RM introduces ISO standards, enhancing security, data integrity and efficiency.
- Dynamic credit tracking: Bank accounts are monitored from noon to midnight, increasing the likelihood of successful collections.
- Equitable processing: RM collections are randomised before EFT presentments, ensuring fair prioritisation of transactions.
- Transparency: Greater visibility of RM mandates increases trust and clarity for both consumers and businesses.
- B2B collections: RM supports mandates for juristic and dual signatory accounts, expanding opportunities for business-to-business collections.
Embracing the future of debit orders
As the March 2025 deadline approaches, South African businesses must view this transition as an opportunity to modernise and strengthen their payment systems.
By refining collection processes, improving authentication rates and aligning with best practices, businesses can adapt to the evolving financial ecosystem while contributing to a more secure, fair and equitable payment system.
Steven Maier
Chief Brand Officer
