Last month we announced that Stitch is now an end-to-end Payments Service Provider (PSP) in South Africa, with solutions specifically designed to meet the needs of enterprise businesses.

In addition to facilitating Instant EFT pay-ins and payouts, today Stitch can facilitate payments via Debit and Credit Card, Cash, and manual EFT - and easily enable recurring payments such as Debit Order and DebiCheck. In addition to these new methods, we also now offer a payments orchestration and reconciliation system, PayOS.

This shift has enabled us to meet demand from businesses with complex payments needs, offering a high level of flexibility and customisation. This includes the ability to collect, manage and reconcile recurring and subscription payments via Debit Order and DebiCheck. 

Understanding the difference between Debit Orders and DebiCheck

For businesses with subscription-based or recurring payment models, Debit Orders and DebiCheck offer an easy, reliable and secure way to manage collections directly from a customer’s bank account. 

What is the difference between Debit Order and DebiCheck? 

A DebiCheck is a type of Debit Order. Both methods require consent from the bank account holder for a business to “pull” money directly from their account. In the case of EFT Debits, or Debit Orders, permission is granted by way of a (Debit Order) mandate in written, voice-recorded or electronic format. 

DebiCheck, on the other hand, requires the account holder to authenticate any debits from their bank. Authentication can be done in various ways and on multiple platforms, which tend to be bank-dependent. Whenever a critical change is made to a DebiCheck instruction, such as a change in payment amount or payment date, DebiCheck requires these changes to be approved by the bank account holder before money can be collected. This provides consumers with more control over money pulled from their accounts. 

DebiCheck might come at more of a premium for businesses, but there are a number of advantages: 

• Priority debit: DebiCheck payments are presented to the bank as a priority ahead of Debit Orders
• Mitigating failed payments: With the ability to track bank accounts, the risk of failed payments due to insufficient funds is much lower
• Decreased risk of chargebacks: DebiCheck payments are not easily disputable, reducing the risk of fraudulent chargebacks

Debit Orders and DebiCheck power seamless recurring collections 

For consumers and businesses alike, Debit Orders and/or DebiCheck enable the most convenient and seamless recurring collections experience. Once permission has been given to a service provider, payment is automatically collected from the specified bank account, allowing the service to be provided without interruption - which might occur, for example, if manual payments are missed.
 

For service providers, benefits include:

• Understanding of cash flow with access to confirmed collection dates and values 
• Saving on payment processing costs by collecting a large number of payments via one method
• Reduced administration and costs associated with following up on late or missed manual payments
• The ability to collect money owed with confidence due to express permission from bank account holders 

Industries that can benefit from Debit Orders and DebiCheck 

Various types of businesses across the spectrum make use of these two payment methods. Generally, subscription-based services like entertainment platforms or fitness centres, and businesses with recurring payment requirements like ISPs, insurance companies or telecommunications businesses, to name a few, benefit from Debit Orders and DebiCheck due to the effortless flow of funds.

What to look for in a Debit Order and DebiCheck service provider

There are many Third Party Payment Providers (TPPP) that offer collection facilities in South Africa. Considerations when choosing the best provider for your business include:

• Understanding of your collection cycles, historical success rate, and cash flow requirements. This ensures that the correct (security) facility is put in place to cater for non-payments or disputes whilst still optimizing your cash flow. 
• Ability to optimise your collection rate and not your billing rate. It’s easy to get lost in the complexities of DebiCheck mandate types, authentication options, and tracking days. A provider who’s transparent with their pricing options, and one who will help you to optimise the money you spend on these collection methods can go a long way to ensuring you maximise revenue 
• Automation of collection and reconciliation processes. Manuel reconciliation results in delays, human error and increased operational costs. Automated reconciliations and up-to-date reporting are essential to a smooth collections process
• Simple, easy mandate signing and/or authentication. Valid mandates are essential to the collection process, but simplifying the signing and/or authentication of the mandates for your clients is just as important. Tedious mandate signing processes can result in delays in the take on processes or payment delays

Supercharge your collections with Stitch Debit Order and DebiCheck

At Stitch, our client-first ethos means we work closely with client teams to co-develop bespoke solutions. We deep dive to understand their needs and leverage our powerful APIs to build solutions that optimise their business processes and customer experience.  

Businesses are able to leverage pre-built, optimised and fully digital flows hosted by Stitch to set up mandates that are compatible with their existing checkout flows. Most importantly, we keep clients' brand at the forefront and avoid complex redirects.

Our ability to verify bank accounts can be used to enhance KYC checks and reduce the risk of fraudulent or failed payments, and chargebacks. What’s more, through a single Stitch integration, businesses have the ability to collect payments via Debit Order, Card, Instant EFT, Cash or Direct Deposit. By using a combination of certain payment methods, they can optimise collection rates and enjoy a streamlined reconciliation process.