Middle East & Africa Paytech Trending

Direct Debit System Launches Bank Agnostic, Paperless, Recurring Payments Platform in UAE

The UAE-based fintech company, Direct Debit System, has launched its all-in-one platform, Direct Debit Marketplace, facilitating recurring payments such as school fees and rent. The platform is the UAE’s first paperless direct debit marketplace.

Direct Debit Marketplace provides payers and merchants with a simple and convenient all-in-one solution to conduct recurring payments. In addition to the services already mentioned, the platform facilitates payments for insurance, gym memberships, and any other subscription-based service.

Available to organisations that take recurring fees in any sector of business, the Direct Debit Marketplace platform is bank agnostic, which means that it does not affect the merchants’ relationship with their banking services provider. The platform offers all users peace of mind, as direct debits facilitated through the platform are integrated with, and regulated by, the UAE Central Bank. Payers also benefit from cancellation control, within their contractual terms of agreement.

Direct Debit is an Alumni of the MBRIF Innovation Accelerator programme, an initiative launched by the UAE Ministry of Finance to support nationwide innovation.

Commenting on the launch, Fatima Al Naqbi, chief innovation officer at the Ministry of Finance and MBRIF representative, said: “We are delighted to see the launch of Direct Debit, another success story from our Innovation Accelerator programme, where we nurture promising startups that innovate and use technology to disrupt industries. Direct Debit is a perfect example, providing merchants and payers in the UAE with a marketplace where they can transact recurring payments efficiently at low cost. At MBRIF we will continue to align with the UAE’s vision to facilitate innovation and support growth, diversification and excellence in the country.”

Ummair Butt, founder and CEO of Direct Debit System said: “Writing four cheques for rents or three for school fees are common place in UAE. Our Direct Debit Marketplace app provides residents and citizens with a safe, legal alternative to make all their recurring payments in one place, ideally on a monthly basis.”

Butt added, “Monthly payments and avoiding quarterly or bi-annual bulk payments means Direct Debit Marketplace can help over 96 per cent of monthly salaried people to stay in control of their finances and out of debt. This is especially important knowing that rents and school fees account for more than 50 per cent of their salaries. Our mission is to encourage a culture of monthly direct debit payments for all big or small ticket items at very low cost to merchants and free of charge for payers.”

A study has shown that allowing customers to pay with their incomings (salary) reduces bounce payments by 41 per cent.

“It is also hugely cost-effective for merchants who currently accept payments through credit cards or cheques. For example, a typical credit card payment would mean merchants pay somewhere between one to three per cent of the transaction value. With Direct Debit Marketplace, we offer a fixed fee, regardless of the credit card or bank account, and there is no need to warehouse and process cheques. The Marketplace offers digital reconciliations for all direct debit payments, meaning massive cost, time and human resource savings for participating merchants, as existing staff can be retrained to handle business growth.”

UAE-based merchants can easily connect Direct Debit Marketplace with their accounting software or use the state-of-the-art dashboard. The platform is merchant driven which means a payer can only make Direct Debit payments if the biller/merchant makes an offer first. The app asks payers to digitally accept a payment offer before the signing process of a direct debit mandate begins.

The platform is integrated with UAEPASS, the UAE’s secure digital identity. One-time direct debit payment set up can only be done through UAEPASS, which makes the whole process 100 per cent paperless. This also means that users will need the UAEPASS app downloaded on their smart phones and they must have ”signature qualified status” to sign a Direct Debit mandate, providing an enhanced level of security.

Butt added: “Data security is very important for us and the system is hosted in Dubai’s Data Center, known as Dubai Pulse. This makes us DESC (Dubai Electronic Security Center) compliant, with data positioned safely behind government firewalls and systems, which are the best in the world. Direct Debit Marketplace is a Decretal System of the UAE, which means the system is accepted by the national courts. With recent changes to laws related to cheques, both paper-based redundant cheques and new paperless digital direct debits carry equal weight when it comes to the law.”

The new service is sponsored by National Bank of Fujairah (NBF). Commenting on this development, Vince Cook, CEO at NBF said: “The bank is continually looking to see how emerging technologies can be utilised to improve the services available in the UAE market and we are particularly pleased to be collaborating with the Direct Debit Marketplace. The introduction of direct debit payments is a very welcomed step forward for the UAE banking system. It makes recurring monthly payments much quicker and easier to set up and manage, for both payers and merchants, across a wide range of business sectors.”

“The proposed direct debit framework puts operational integrity and data security at its heart, key considerations for NBF, providing a high level of reassurance ahead of the roll-out of the new app,” added Cook.

Set to be fully operational during the fourth quarter of 2022, Direct Debit Marketplace is now accepting expressions of interest and applications from merchants. As it is a legal system, all participating merchants of Direct Debit Marketplace must go through a mandatory KYC (Know Your Customer) process, carried out independently by Crif Gulf who represent Dun & Bradstreet in the UAE.

Author

  • Francis is a journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

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