What is RM vs RMS, and how can businesses prepare?

Effective March 2025, the current Registered Mandate Service (RMS) will transition to the Registered Mandate (RM) debit order payment stream. 

Businesses relying on RMS to improve collection rates will be impacted by the change. It’s therefore necessary for enterprises and merchants to understand what this change entails and how they can update their collections models to succeed in the new landscape. 

For businesses currently using debit order, now is a good time to transition to DebiCheck for verified mandates, to reduce failed or disputed payments.

What is RMS and how does it work?

RMS is currently a fallback solution for businesses offering DebiCheck collections: DebiCheck is a debit order collection method that safeguards consumers and merchants from unauthorised debit orders and impermissible reversals and disputes by requiring a digitally authorised mandate. This transaction type requires a once-off authentication of the mandate by the consumer with their bank. Thereafter, a record of the mandate is kept by the bank, and all collections are processed against the account in line with the mandate terms.

If consumers do not sign a DebiCheck mandate at the time of the initial request, businesses can choose to initiate an RMS collection against their accounts, which does not require the same digital signature and functions more like a traditional debit order. 

This came about when DebiCheck was being introduced, as the industry needed to get acquainted with the process and develop the proper mechanisms within their payments flows. As a result, DebiCheck mandate requests, although legitimate, often went unactioned. To help businesses process legitimate debit orders and provide uninterrupted services to their customers, RMS was introduced as a fallback method to enable businesses to collect from the customer’s account. This was done with the understanding that businesses would convert the RMS transactions to DebiCheck run by working with their customers to authenticate the mandate via their banks. 

How is RM different?

What makes RMS effective for enterprises lies in its processing window. RMS collections are processed early in the morning, just after the DebiCheck run which comes immediately after the credit runs. As a result, collection success rates improve as debits are processed at a time of the day when accounts are more likely to be funded. However, RMS was not designed to substitute DebiCheck, and the increasing volumes began to raise concerns about the risks of processing unauthenticated debit orders. This year, the South African Reserve Bank (SARB) introduced RM to address this business practice. 

RM, like RMS, is a fallback option for payers who fail to authenticate the DebiCheck mandate. However, unlike RMS, RM transactions will be processed later in the day during the evening windows, meaning there is a higher chance that the transaction may fail due to lack of funds in the account. 

Challenges for businesses who rely on RMS

It's common practice that consumers move or withdraw funds from their bank accounts before debit orders are processed against those accounts. Morning processing mitigates this risk as collections are processed soon after the window for credits, including salaries, are processed. However, the later in the day a debit order is processed, the higher the risk of the consumer’s account having insufficient funds to process the debit. 

Businesses need to be aware that the move from morning to evening processing can impact their collection success rates. Fortunately, RM does have the functionality to track the payer’s account for funds (credit tracking), ensuring that the collection is processed as soon as the account is sufficiently funded. 

Why businesses should move to DebiCheck

While credit-tracking is a useful feature, it does not compete with the efficiency of processing collections using an authorised DebiCheck. 

First, DebiCheck collections are prioritised above all other collection methods. They are processed in the early morning window, ensuring that businesses have a higher collection success rate against their customers’ accounts. 

Second, DebiCheck transactions are secured because the mandate has been authenticated by the payer. The bank’s digital record of the approved mandate legitimises the transactions, guaranteeing that service providers are paid. Similarly, the traceability and transparency of the digital mandates protect consumers’ accounts from unauthorised debits. 

While investing in a system that supports DebiCheck can be expensive, over time the reduced number of disputes and reversals that are common with unauthenticated methods can save businesses significantly on resources spent managing failed payments, as well as on fees for failed collections and on generally uncollected mandates. 

How businesses can prepare for RM

To prepare for RM, businesses should review their debtor portfolio and determine their current dependency on RMS. If RMS volumes are increasing or not converting to DebiCheck, this is the time to actively engage clients to authenticate DebiCheck mandates with their bank. Fortunately, this is a one-off step that doesn’t require any further action from the payer until the end of the contract. 

If a business is not prepared for the change before March, Stitch can expedite their readiness and ensure uninterrupted operations by assisting with  moving customers from RMS to RM, and eventually to DebiCheck.

Seamless and pain-free transition

Stitch enables businesses to manage EFT debits and adopt industry-leading collection methods like DebiCheck. Go beyond the industry standard and optimise your collections with our merchant-focused solutions, including:

• Multi-method collections through DebiCheck, Card and Pay by bank
• Omnichannel mandates and payments, including in-person TT3 authorisation
• Flexible DebiCheck fallback options, including real time and delayed mandate requests

Get in touch with us to learn more about our intelligent collection solutions.

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