EG-ACH QUICK REFERENCE GUIDE

Transcription

1 EG-ACH QUICK REFERENCE GUIDE Issued: September T A L A A T H A R B S T E V E R G R E E N T O W E R F I F T E E N T H F L O O R C A I R O E G Y P T T : ( 2 ) F : ( 2 ) W W W. E G Y P T I A N B A N K S. C O M

2 Document: EG-ACH Quick Reference Guide Page No. 1 of 12 Table of Contents 1 INTRODUCTION DIRECT DEBIT WHAT IS A DIRECT DEBIT? WHAT COMPANIES USE THE DIRECT DEBIT SCHEME? WHO IS INVOLVED? WHAT IS A DIRECT DEBIT MANDATE? MANDATE TYPES: Irrevocable Mandate Revocable Mandate HOW LONG DOES IT TAKE FOR A TRANSACTION TO GO THROUGH HOW TO BECOME A REGISTERED BILLER HOW TO INITIATE A DIRECT DEBIT TRANSACTION WHO COULD COLLECT THE MANDATES? DIRECT DEBIT FULL CYCLE IS IT SAFE? SEEKING REFUNDS DIRECT CREDIT WHAT IS A DIRECT CREDIT? BENEFITS FOR SENDERS/RECEIVERS WHAT COMPANIES USE DIRECT CREDIT? WHO IS INVOLVED? HOW THE DIRECT CREDIT SCHEME WORKS DIRECT CREDIT WINDOW TIMING Same Day Settlement Windows Forward Value Settlement Window IS IT SAFE?... 11

3 Document: EG-ACH Quick Reference Guide Page No. 2 of 12 1 Introduction The Automated Clearing House System (ACH) is established for bulk processing of individual and recurrent electronic credit and debit transfers initiated by commercial banks or by their customers. Such recurrent fund transfers include direct credit of salary payments by employers, regular remittances by individuals, direct debits from utility companies to collect amounts due from their customers and direct debits from finance companies to collect installments due on consumer loans, etc. This electronic processing of direct credit and direct debit transactions will reduce the economy s reliance on costly check processing. This reference guide is intended for use and reference by banks and their business and private customers, and is divided into two sections, direct debit, and direct credit. 2 Direct Debit 2.1 What is a Direct Debit? A direct debit is a quick, easy and convenient method of making regular payments (e.g. bills, installments, subscriptions, etc ) without having to visit a bank. Direct Debit is used throughout the world and is acknowledged as one of the most cost effective and efficient methods of processing regular and periodic payments. 2.2 What Companies Use the Direct Debit Scheme? Direct Debits are used for bill collection throughout the world, by insurance, utilities, finance, service suppliers, automobile, and other companies that receive regular and periodic payments. It is generally acknowledged by Originators to be the most cost effective and efficient method of bill collection. 2.3 Who is involved? The Creditor (Biller or Originator), i.e. The Company that provides the goods or services. The Creditor Bank, where the originator maintains its accounts. The Debtor (Customer or Payer), i.e. the Bank customer who wishes to pay the bills and whose account is to be debited. Mandate Processor, In charge of collecting the mandates from the banks and converting them to electronic mandates Mandate Portal, portal where mandates are hosted The Debtor Bank, i.e. the Bank holding the Payer s account, which is to be debited. The ACH Network, i.e. the operator of the ACH network, who will perform routing, clearing, and dispute resolution.

4 Document: EG-ACH Quick Reference Guide Page No. 3 of What is a Direct Debit Mandate? A Direct Debit Mandate is an instruction from a customer to his bank authorizing a specific organization, known as the Originator, to collect varying amounts from his account in settlement of outstanding bills for goods or services provided. 2.5 Mandate Types: Currently there are two types of EG-ACH Direct Debit Mandate. Both Mandate types are standard and governed by the scheme, the form of standard Mandate is approved and published by EBC to all participants as they will be obliged to use EG-ACH Direct Debit standard Mandate form in order use the Direct Debit Service. The Debtor could sign any type of Mandate form based on his agreement with the Creditor: Irrevocable Mandate Revocable Mandate In the event of an inconsistency between the Mandate terms and condition stated in the Rulebook, and the Mandate terms and conditions stated in the latest version of the Mandate announced and officially published by EBC, the provisions of the latest terms and conditions stated in the Mandate shall prevail the Mandate terms and condition stated in this Rulebook Irrevocable Mandate The irrevocable Mandate has the following characteristics: All Debit transactions initiated by the Creditor based on the Irrevocable Mandate shall be irrevocable transaction and could not be subject to refund upon Debtor request. Payment frequency as per the underlying payment terms and conditions stated in the signed contract between the Creditor and the Debtor, such contract is not governed by the scheme. Mandate shall not be cancelled without mutual agreement between the Debtor and the Creditor. In the event that the Creditor has misused the Irrevocable Mandate, the Debtor could submit a claim to EBC through the Debtor bank. EBC shall provide dispute service to EG-ACH Participants. Dispute process may be used for resolving Unresolved Issues that arise in respect of the Irrevocable Mandate and relevant Direct Debit transactions between the Debtor/Debtor Bank and the Creditor/Creditor Bank, the following issues shall be subject to dispute: o The Debtor decides to dispute Direct Debit transaction due to a breach occurs by the Creditor to the Mandate terms and conditions. o The Debtor submits an Irrevocable Mandate cancellation request. Dispute is applicable for the Irrevocable Mandate and relevant Direct Debit transactions only under the terms and conditions stated in the Dispute rules document shared and announced by EBC.

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6 Document: EG-ACH Quick Reference Guide Page No. 5 of Revocable Mandate The Revocable Mandate has the following characteristics: All Debit transactions initiated by the Creditor based on the Revocable Mandate shall be subject to refund upon Debtor request. Payment frequency should be defined in the Mandate; the debtor must specify the payment frequency upon signing the Mandate. Mandate could be cancelled upon Debtor request from the Debtor Bank

7 Document: EG-ACH Quick Reference Guide Page No. 6 of How long does it take for a transaction to go through The Direct Debit Scheme works with a window timing session where the Creditor has the power to send/receive any transaction and/or reverse/cancel it if he wishes, while the debtor could easily reject any incoming transactions due to any technical obstructions. 2.7 How to Become a Registered Biller The biller submits a request to his bank in order to become his sponsor bank and if the bank accepts to sponsor the biller, the bank will assist the biller to fill the registration form and submit it to EBC then the biller will receive his unique OIN. 2.8 How to initiate a Direct Debit Transaction 1) Become a registered biller a) Only a biller could initiate a Direct Debit Transaction through the sponsor bank (Creditor Bank) 2) Collect Mandates 3) Activate collected mandates through Debtor Bank 4) Initiate Direct Debit Transaction 5) Represent uncollected transaction 2.9 Who Could Collect the Mandates? Mandate processors who were authorized by the biller to collect their customer s mandates

8 Document: EG-ACH Quick Reference Guide Page No. 7 of Direct Debit Full Cycle The Creditor invites the Payer to pay his bills by using the automated Direct Debit Scheme. The Debtor agrees to use the scheme, completes and signs a Direct Debit mandate form. Creditor dematerialize the physical Mandate into electronic Mandate on the Centralized Mandate Portal System. The Creditor sends the completed physical Direct Debit Mandate to the Debtor Bank. The Debtor Bank then records the fact that the Debtor has given permission to the Creditor to debit his account subject to the terms of the Mandate he has signed and activate the relevant electronic Mandate The Creditor starts presenting Direct Debits to the customer s account The Debtor Bank debits the Payer s account (the account nominated in the mandate), and the Originator s account is credited Direct Debits can be presented for payment for as long as the Mandate remains valid The Creditors Direct Debit File should contain the following info per collection (name, bank account, UMR, amount of collection and purpose transaction reason) 2.11 Is it Safe? Yes, the scheme is completely safe and is sponsored and governed by EBC. Customers need not be concerned about signing a Mandate allowing bills to be paid directly from their accounts, as the scheme rules guarantee a refund if any incorrect amounts are deducted. In fact, it is safer paying by direct debit than by cash or checks because of the scheme guarantee. Originators are bound by the Direct Debit scheme rules, and consequently may only submit debits to a customer account strictly in accordance with the terms of their contracts with them Seeking Refunds Payers can at any time question the validity of a direct debit applied to their accounts. If a customer wishes to make a claim, he should contact his bank and provide them with the relevant details. He should also complete the Direct Debit claim form, which will be available at the bank. If it is proven that an error has been made by the Originator or the bank, the Payer will receive a full and immediate refund under the terms of the Direct Debit scheme rules.

9 Document: EG-ACH Quick Reference Guide Page No. 8 of 12 3 Direct Credit 3.1 What is a Direct Credit? A direct credit is a quick, easy and convenient method of making deposits into a beneficiary's account (e.g. pensions, dividend payments, inward remittance credit, etc ) without having to visit a bank. Direct Credit is used throughout the world as well and is acknowledged as one of the most cost effective and efficient methods of sending funds to a customer's account 3.2 Benefits for Senders/Receivers Cash Concentration in only one bank The ability to transfer money throughout the 38 banks of Egypt No need to wait for a check from your bank or financial/brokerage institution. No need to wait in line to receive your pension payment. Fast and convenient and the money moves instantly between accounts. 3.3 What Companies Use Direct Credit? Direct Credits are used by the government, banks, corporates and financial and stock brokerage institutions to deposit pensions, wire transfers, and stock dividends to beneficiaries. It is generally acknowledged by Originators to be the most cost effective and efficient method of bill collection. 3.4 Who is involved? The Originator: The initiator of the credit payment instruction (Governmental. Corporate. Financial institution.) The Originating Bank: Bank of the originator. The ACH Operator: The ACH Network, i.e. the operator of the ACH network, who will perform routing, clearing, and dispute resolution. Provider of the inter-bank clearing of the payment instruction The Beneficiary Bank: Bank of the receiver The Beneficiary: The receiver of the credit payment instruction 3.5 How the Direct Credit Scheme Works The originator submits a request to its bank to initiate a Direct Credit transaction to credit the beneficiary account in any working bank in Egypt. The Banks uses the EG-ACH to send and receive electronic funds transfer.

10 Document: EG-ACH Quick Reference Guide Page No. 9 of Direct Credit Window Timing Direct Credit could be submitted in three windows each day two of them settle on the same day and the Third one uses forward day value. In Direct Credit the Originator has the ability to send/ receive any transaction to the Beneficiary while the beneficiary could reject if he wishes and even return it back to the originator Same Day Settlement Windows

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12 Document: EG-ACH Quick Reference Guide Page No. 11 of Is it safe? Direct Credit transactions are very safe as long as the account numbers the money is being deposited into are accurate.