These Terms of Use form part of the agreement which governs the use of the DebiCheck payment stream and further regulates the relationship between FirstRand Limited (hereafter known as FRB) and the Debit Order Originator (hereafter known as the User).

The Terms of Use defines the processes, procedures and standards to be used in the day-to-day operations in the DebiCheck payment stream.

1.2 Glossary

ABBREVIATION	CLARIFICATION
AC	Authenticated Collections
ACT	Authenticated Collections Transaction (as per AC terminology)
AEDO	Authenticated Early Debit Order
BRD	Business Requirement Document
CR	Credit
DOA	Debit Order Abuse
DR	Debit
EDO	Early Debit Order
EFT	Electronic Funds Transfer
EFT CR	EFT Credits
EFT DR	EFT Debits
EMV	Europay/MasterCard/Visa (standards)
ISO	International Standards Organisation
MAC	Message Authentication Code
mPOS	mobile Point Of Sale
NAEDO	Non Authenticated Early Debit Order
NPS	National Payment System
NPSD	National Payment Systems Department
OTA	Over The Air
OTP	One Time Password
PASA	Payments Association of South Africa
PASA EXO	Payments Association of South Africa Executive Office
PCH	Payment Clearing House
PCH PG	Payment Clearing House Participant Group
PCI DSS	Payment Card Industry Data Security Standard
PCI PTS	Payment Card Industry PIN Transaction Security
PIN	Personal Identification Number
POS	Point of Sale
PRF	PASA Regulatory Framework
PSO	PCH System Operator
PSSF	Payment System Stakeholder Forum
RAEDO	Remote Authenticated Early Debit Order
SAMOS	South African Multiple Option Settlement System
SARB	South African Reserve Bank
SID	SteerCo Interpretation Document
SO	System Operator
SteerCo	Steering Committee
TOR	Terms of Reference
TPPP	Third Party Payment Provider
TRS	Technical Requirements Specification
ABBREVIATION		CLARIFICATION
TT	Transaction Type
WG	Work Group

1.3 Definitions

TERM	DEFINITION
Abbreviated Short Name	A mandatory field within the reference field reflecting the ultimate creditor trading name and not exceeding the first 10 characters in that field.
Action Date	The date provided by the User for Collection.
Adjustment Category	Refers to the ability to adjust the Instalment Amount and Maximum Collection Amount. (Never, Quarterly, Biannual, Annual, Repo,)
Adjustment Amount	Amount that the Instalment Amount and Maximum Collection Amount can be adjusted based on Adjustment Category. This value can be negative.
Adjustment Rate	Rate that the Instalment Amount and Maximum Collection Amount can be adjusted based on Adjustment Category. This value can be negative.
Agreement	The contractual arrangement, including a loan agreement or a sales agreement, between an Accountholder and a User.
Alleged Fraud	Any claim made with regards to a transaction or potential transaction allegedly intended to defraud or deceive the Banks, User or Accountholders.
Authenticated Collections / DebiCheck	A verified authorisation given by the Payer through their Paying Bank to allow the User to collect against his account at the Paying Bank in the Early Collection window.
Authentication	The process of authorising a debit order mandate by the Payer using an authentication method that has been endorsed by the Paying Bank.
Authentication Indicator	Indicator in User’s /Creditor’s amendment request to advise if Mandate requires Authentication from Payer/Debtor, or Mandate does not require Authentication from Payer/Debtor.
Authentication Key	Is a means by which the Paying Bank validates/verifies that the message received has been legitimately endorsed by their Payer. (e.g. Accountholder access password, Personal Identification Number (PIN), One Time Password (OTP)).
Authentication Channel	Identifies the mechanism used by Paying/Debtor Bank to Payer/Debtor for authentication.
Authentication Request	The interbank message submitted by the Sponsoring Bank to the Paying Bank, via the PSO, which requests the authorisation/approval from the Payer for the debit order, using one of the recognised authentication methods.
Authentication Response	A message whereby the Paying Bank, via the PSO, provides the Sponsoring Bank with the outcome of authorisation.
Authorise or Authorised	A positive acknowledgement received by the Paying Bank from the Payer against an Authentication Request.
Automated Teller Machine	An unattended Device or machine through which a Payer may issue PIN verified electronic Debit Payment Instructions for the purpose of, inter alia, drawing cash, making payments to third parties and obtaining account information.
Bank	A financial institution actively providing products and services commensurate with that of a ‘Bank’ as defined in the Banks Act, 1990. The term ‘Bank’ will also include any ‘Designated Clearing System Banks’ as defined by the NPS Act, 1998.
Business days	Monday to Saturday (excluding public holidays)

TERM	DEFINITION
Calendar days	Monday to Sunday, including Public Holidays.
Card	A payment instrument linked to a primary deposit access bank account that complies with EMV and ISO standards, and which enables a Cardholder to initiate a card Payment Instruction (magstripe and PIN or Chip and PIN).
Cardholder	The person to whom a card has been issued by the Paying Bank
Clearing	The exchange of Payment Instructions between the Payer's Bank and the Sponsoring Bank – as per the NPS Act.
Client confidentiality	The principle that an institution or individual should not reveal information about their Accountholders to a third party without the consent of the Accountholder or a clear legal reason as dictated by any applicable law/s.
Collection Day	The day included in the Mandate and authorised by the Payer on which the User can submit Payment Instructions for processing to the Payers account.
Contract Reference Number	The number issued by the User/Creditor to the Payer/Debtor when a contract is concluded between both parties. Only one Contract Reference number per Mandate.
Credit Tracking	A process where Payment Instructions that were not paid upon initial presentment are held over for re-presentment. Tracking may follow minimum or full credit tracking rights.
Cycle Date	The date for which the payment was or is intended for collection.
Cycle Day	Cycle Day as selected for the frequency.
Cycle Period	The period of the Frequency.
Date Adjustment Rule Indicator	Used to indicate that Collection Day could change (yes / no)
Debit Order Abuse (DOA) List	A list of Users that have been identified as non-compliant as per the debit order abuse process.
Debit Value Type	Indicator to describe the mandate type (i.e. Fixed, Variable or Usagebased).
Debit Pull	Payment Instructions that require the recipient (or its bank) to collect funds from the Payer, effectively causing the Sponsoring Bank/Collecting Bank to 'pull' the funds through the payment system.
Disputes	Refers to either a Dispute Request or a Dispute Action.
Dispute Request	A request by the Payer to dispute the validity of a (successful) collection against their account.
Dispute Action	A successful dispute request that results in a reversal of funds from the User to the Payer.
Early Collections	Collections processed in the early window after salary credits have been processed.
Effective Action Date	The date of presentment of a Payment Instruction and can differ from the action date where the action date falls on a non-processing day. In the response message of a Payment Instruction presented, it refers to the date on which the Payment Instruction was finalised.
Europay/MasterCard/Vis a standards	Europay, MasterCard and Visa Chip Card standards as specified in the relevant EMV Specifications that define the interactions between Chip Cards and Chip capable Devices to ensure international interoperability.
Fate Message	The response to the Sponsoring Bank regarding the outcome of the presented Payment Instruction.
First Collection	The first instalment or premium that differs (are irregular) to the rest of the normal instalments or premiums for instance with insurance agreements or where deposits are required to be made.
Fixed Mandate	Mandate whereby the calculated Instalment Amount due and Maximum

TERM

DEFINITION

Instalment/Collection Amount is known upfront and authenticated by the Payer. Includes Maximum Instalment/Collection Amount used during representment to cater for late payment/arrear interest calculations.

Fraud

Deliberate deception to unlawfully gain access or potential access to money in an account of a Bank, User or Account Holder (a proven outcome after an investigation into alleged fraud indicating has been conducted).

Frequency

The regularity of the collection, namely:

Weekly – Monday to Sunday

Fortnightly – Monday to Sunday over 2 weeks, starts first Monday of the Calendar Year

Monthly – first to last day of Calendar Month

Quarterly – every 3 months starting from the first day of the Calendar

Year

Bi-annually – every 6 months starting from the first day of the Calendar

Year

Annually – starts at the first day of the Calendar Year for 12 Calendar Months

Monthly By Rule –

01 - Last Monday	02 - Last Tuesday
03 - Last Wednesday	04 – Last Thursday
05 - Last Friday	06 - Last Saturday
07 - First Monday	08 - First Tuesday
09 - First Wednesday	10 – First Thursday
11 - First Friday	12 - First Saturday
13 - Last Day	14 - 2nd Last Day

Full Credit Tracking

The re-presentment of a previously unsuccessful Payment Instruction due to insufficient funds, which re-presentment is triggered each time a Credit is processed to the account and the first attempt occurs immediately after the processing of bulk credits, and the subsequent attempts (if any) each time a Credit is processed to the applicable account during the course of the day.

Item limit

The maximum monetary value of a single transaction that may be submitted by a User as governed by the PCH Rules.

Initiation of mandate

The start of the identification and authorisation process when the compulsory components required per mandate type is presented to the payer for authentication.

Initial Amount

The first / initial Collection value.

Instalment amount

Amount used for Fixed and Variable Mandate contracts where an upfront calculated repayment amount is the basis for normal collection. Amount optionally used in Usage Based where an upfront calculated repayment amount can be the basis for normal collection.

Last/Final Instalment Amount

The last or final collection for a mandate (required for Fixed and Variable mandate types). Subject to a re-presentment if last/final presentment was not collected on. The value can be greater than or less than the Instalment Amount mandated by the Payer but within the Maximum Collection Amount.

Mandate

The authorisation given by the Payer to the User allowing the User to initiate a Payment against the Payer’s account.

Mandate Initiation Date

Date on which mandate is first submitted for authentication

Mandate Database

Database containing data elements maintained by the User (or their appointed System Operators or Third Party Payment Providers) on

TERM	DEFINITION
	behalf of their clients (as intermediaries) in order to generate and submit Payment Instructions.
Mandate Authentication Date	Date on which the mandate Authentication process was completed by Paying/Debtor Bank that will be indicated in the response message. Must be stored for each authentication
Message Authentication Code	MAC or authenticated key/electronic signature, if generated by Authentication mechanism.
Mandate Reference	Unique industry-wide reference number for the mandate, generated by the mandate initiation process (will be provided by the Paying/Debtor Bank in authorisation request).
Mandate Register	Database containing, as a minimum, the essential data elements required for the mandate authentication and payment validation processes.
Maximum Collection Amount	The agreed Maximum Instalment Amount that may be collected under an agreement between User and Payer. Used for Fixed and Variable mandates to accommodate arrear interest during representment; where the Maximum Instalment Amount cannot exceed 1.5 times the Instalment Amount (Usage based mandates are not subject to this rule, even when the optional “instalment amount” field is provided in the mandate). Used for Usage Based mandates and constitutes the agreed Maximum Instalment Amount that may be collected under an agreement between User and Payer. The Maximum Collection Amount in any mandate type is known and authenticated by the Payer upfront.
Minimal Credit Tracking	A credit tracking process used by the paying participant in terms of which the first presentment plus one re-presentment and/or two representments are attempted per day and of which the first attempt on the day must occur immediately after the processing of bulk credit and the remaining attempt during the course of the day.
Notification	The electronic notification by the Paying Bank to the Payer by any channel of the requested amendment
Once Off collection	A single collection OR an irregular collection for an underlying contract for settlement of a contract or where an arrear amount exceeds the Maximum Collection Amount. It will be used within the boundaries of a Fixed mandate type.
Payer/Debtor (i.e. Accountholder)	The holder of the account at the Paying Bank on which debits will be debited upon payment of a Payment Instruction which includes natural persons and incorporated entities using an official identification number.
Paying Bank	The Payer’s Bank (also known as the Debtor Bank).
Payment Clearing House	Any formal arrangement between banks whereby banks exchange Payment Instructions.
Payment Instruction	An instruction to a Bank to transfer funds or make a payment.
Payment System	A system that enables payments to be effected or facilitates the circulation of money and includes any instruments and procedures that relate to the system.
Payment Cycle	A time period relating to the start and end of the frequency of the Payment Instruction.
PCH System Operator	A person or persons appointed by each party to provide payment clearing processing services on behalf of such parties in the PCH, which appointment is subject to the authorisation of PASA as contemplated in clause 13 of the PCH Agreement.
PIN OTA	Personal Identification Number over the Air is the terminology used in

TERM	DEFINITION
	the Card environment to communicate with, download applications and manage a PIN without being connected physically to the Card.
Point Of Sale	The the place at which a retail transaction is carried out. Point Of Sale terminal (POS terminal) is an electronic Device used to process Card type payments at Merchant locations.
Processing Days	Monday to Saturday for 6 day processing Members, (excluding public holidays) or Monday to Sunday for 7 day processing Members (including public holidays).
Public Holidays	Non-business days as declared by the South African Government under the Public Holidays Act.
Randomisation	The process of combining all AC, NAEDO and AEDO Payment Instructions at account level, with no pre-determined outcome, including on-us and off-us transactions.
Real Time Authentication	120 seconds from transaction origination (request message) to transaction completion (response message).
Recurring collections	A collection within a reoccurring/repetitive frequency as agreed between Payer and User.
Represented collections	A submission of a collection by a User for a previously unsuccessful collection.
Settlement	The final and irrevocable discharge of an obligation of one bank in favour of another bank, in central bank money.
Sponsoring Bank	The Participant bank with which the User entered into a User agreement.
Mandate Suspensions (previously Stop Payments)	The process whereby a Payer requests the Paying Bank to stop all future AC Debit Payment Instructions related to a specific AC mandate on their account.
System Operator / Service Provider	Any person who provides payment services to two or more persons in respect of payment instructions.
TPPP - Third Party Payment Providers	Any person who provides payments to third persons and who processes payment instructions, including the delivery to and/or receipt of payment instructions from a bank and/or a PCH system operator on their own behalf.
Tracking	The re-presentment of previously unsuccessful Payment Instructions due to insufficient funds in the Payer’s account. Authorisation from Payer allows the User the ability to use Credit Tracking.
Tracking Indicator	Specified if Tracking may be used for Collections
Tracking Period	A period in days, commencing from Action date of Collection until a max of 10 days.
Ultimate Creditor	The ultimate party to which an amount of money is due
Unidentified Debit Order	The Debit Order on an Accountholder statement not being recognized by the Accountholder.
Usage based Mandate	Mandate used for contracts to be collected on as defined by the usage of a service provided during a payment cycle which has an amount due TO the value of a Maximum Collection Amount.
User / Merchant / Creditor	A person or a body (including a bank) that submits payment related messages directly (in the case of a bank) or indirectly via a SO for their Sponsoring Bank to the PSO for processing.
User Verification	Identification of the User by the Sponsoring Bank.
Variable Mandate	Mandate used for contracts where an upfront calculated instalment amount is the basis for normal collections but that can be amended by the User in relation to variables which are known and authenticated by the Payer upfront; e.g. annual increases, interest rate linked loans. Includes Maximum Instalment/Collection Amount used during representment to cater for late payment/arrear interest calculations.
TERM	DEFINITION
	This calculated Instalment Amount due and Maximum Instalment/Collection Amount is known and authenticated by the Payer.

1.4 Conventions

1.4.1 The following conventions apply with regards to grammar and usage throughout the rules:

1.4.1.1 The singular imports the plural and vice versa. For example: “A Paying Bank must …” implies that “All Paying Banks must …”

1.4.1.2 Capitalised words have a special meaning in lieu of their dictionary meaning. These terms are defined in the Definitions clause, of these rules.

1.4.1.3 Bold type is used for visual emphasis.

1.4.1.4 Reference to other documents is in italics.

1.4.1.5 Authenticated Collections and DebiCheck are interchangeable and carry the same definition.

1.4.2 These Terms of Use is for the Pilot Period only it is by no means a complete set of rules, but merely serves as a framework.

1.4.3 These Terms of Use will not be used for compliance purposes during the DebiCheck Pilot period and will be used to enable the Pilot processing, for interpretational purposes.

2 GENERAL

2.1 Compliance with Rules

2.1.1 All participants must ensure that all rules and standards for Payment Instructions processed have been complied with as described in these Terms of Use.

2.1.2 Non-compliance may lead to the Compliance Enforcement Policy to be invoked.

2.1.3 All DebiCheck financial transactions must conform to the agreed item limit for DebiCheck as defined in the PCH Agreement.

2.2 System Operator and Third Party Payment Providers

System Operators and Third Party Payment Providers:

2.2.1 Comply with all applicable Directives issued by the SARB National Payment System Department and/or PASA.

2.2.2 Meet all the standards as required by its sponsoring participant.

2.2.3 Have a short name for each User that it processes on behalf of.

2.2.4 Only process for one layer of Users.

2.2.5 Must not allow any equipment and/or systems used to store payment card Track 2 information or PIN.

2.2.6 Provide for sanctions in cases of non-compliance of their Users.

2.2.7 Must have a breach clause allowing immediate suspension of a User in cases of risk introduced or if contract is breached.

2.2.8 Provide for a service level agreement between the Sponsoring Bank and its System Operator as well as an agreement between the SO and its Users.

2.2.9 Ensure that all requests for authentication be delivered to the Sponsoring Bank either in real time or batch, according to the method being applied.

2.2.10 Ensure that it submits all Payment Instructions to the User’s Sponsoring Bank.

2.2.11 Be able to stop services to a User immediately on instruction of the Sponsoring Bank.

2.3 Users

2.3.1 Adhere to the Sponsoring Bank rules and terms and conditions for DebiCheck.

2.3.2 Only process in the Interbank Payment System via a Sponsoring Bank or approved SO with whom they have an agreement.

2.3.3 Will not submit transactions unless authorised to do so by its Payer. Authority to do so is given via an Authenticated Mandate and loaded on the Mandate Register.

2.3.4 Ensure that the First Collection, current Payment Cycle Collection and arrears Collection instructions are correctly identified.

2.3.5 Will not present more than two DebiCheck Payment Instructions (i.e. a recurring and representment) for any one Mandate within a Payment Cycle.

2.3.6 Ensure that their Mandates conform to the Mandate checklist.

2.3.7 In the event of assignment/cession, the User’s Abbreviated Name may be changed. Users must provide one month’s notice of the changed details prior to the processing of any future Payment Instructions to the Accountholder. The notice must reflect the User’s new abbreviated name, must be kept as an addendum to the agreement and ensure the mandate is updated at the paying Bank.

2.3.8 A Mandate can be un-suspended by a User through re-authentication by the Payer.

2.3.9 Users must cancel Mandates once the underlying contract has been fully satisfied and/or terminated.

2.4 Client Confidentiality

2.4.1 Customers’ personal information must be kept private and confidential, even when the customer is no longer a client of the participant.

2.4.2 All Participants must only use Mandate Information for Collections, Disputes, and Mandate Suspensions.

2.4.3 Paying Bank must only use mandate information for debit order processing, it may not be used for any other purpose such as marketing or retention.

2.4.4 The Paying Bank must make available the User information on the Mandate (including the legal entity name and trading name of the User Abbreviated Short Name and any available contact information of the User) to the Payer on request.

2.4.5 The Paying Bank must not disclose the Payer’s personal information to the requesting Bank unless:

2.4.5.1 Compelled by law.

2.4.5.2 Where there is consent of the Payer.

2.4.6 Participants will under the following conditions disclose account holder to the requesting bank:

2.4.6.1 Tracing of payments

2.4.6.2 Recall /Reversal requests

2.4.6.3 Disputed and mandate suspensions

2.5 Document Retention

2.5.1 The Mandate must be retained by the User for at least five (5) years after expiry of the underlying Agreement. The inability to produce a Mandate shall mean no Mandate ever existed and shall constitute a breach of these Rules and subject to the DOA process.

2.5.2 Users must retain all documentation and information for a minimum period of five (5) years after each Payment Instruction was processed.

3 MANDATE MANAGEMENT

3.1 General

3.1.1 The User must keep a copy of the Mandate and contract in a form that enables the efficient resolution of Payer disputes.

3.1.2 Mandates contained within the Mandate Register must not be duplicated.

3.1.3 Mandates must contain the minimum data elements as defined in Appendix F.

3.1.4 The minimum information which must appear in all mandate types (i.e. fixed, variable or usage based) for voice, written or electronic (not incorporated into the contract document) or which is to appear in the contract document (in which the mandate is also embedded), is set out in Appendix F. With regards to the latter, the contract document would have to be disclosed in order to evidence the existence of the information set out below.

3.1.5 Mandates submitted by the User will be verified by the Sponsoring Bank prior to submission to the PSO. Mandates received by the Paying Bank from the PSO must be validated and sent for notification or authorisation by the Payer (Appendix E), if required.

3.1.6 Users must retain all mandates for a minimum period of five (5) years after the last Payment Instruction relating to the mandate was processed.

3.1.7 Upon request from the Sponsoring Bank, Users are required to produce, at their own cost, a copy of any original mandate that is requested.

3.1.8 The Mandate Database, if used, can be housed at the User or delegated to a PSO/Service Provider/Sponsoring Bank that offers such services.

3.1.9 The Mandate Register is housed at the Paying Bank, who may choose to outsource this responsibility to a third party.

3.1.10 The purpose of the Mandate Register excludes any other applications including credit risk management as well as cross sales and marketing actions and initiatives.

3.2 Mandate Initiation

3.2.1 The Paying Bank must perform the following minimum validation:

3.2.1.1 The Payers Bank account must allow for Debits.

3.2.1.2 The Payer’s Identity Document number, Passport number or Temporary Identification number must be verified against the Payer’s details.

3.2.2 The Paying Bank must create a unique mandate reference number per mandate initiation request on authorisation by the Payer.

3.2.3 In the case of mandate authentication with a card present process, the interaction must be face to face.

3.3 Mandate Amendment

3.3.1 Real time or batched amendments are allowed.

3.3.2 Mandate amendment request/s must use the mandate reference number/s to identify the mandate/s that it needs to amend.

3.3.3 All mandate amendments must originate from the Ultimate Creditor.

3.3.4 Both the User and the Paying Bank must determine if the mandate amendment requires authentication by the Payer.

3.3.5 The User must indicate if the amendment request requires re-authentication.

3.3.6 If the Paying Bank’s validation fails, then the request must be rejected.

3.3.7 The Paying Bank must validate if the Mandate amendment requires Authentication, or Notification to the Payer or where no action by the Payer as per Appendix E.

3.3.7.1 If the requested change requires Authentication, the Paying Bank must request Authentication from the Payer of the change. If Authentication is then obtained, the Paying Bank must update the Mandate Register with the new details including when Authentication has been provided.

3.3.7.2 If Notification is required then the Paying Bank must update the Mandate Register with the new details and notify the Payer.

3.3.8 The User must receive the outcome (i.e. where the Payer was notified or where the amendment was authorised, not authorised, or no response by the Payer) of the amendment prior to submission of the next payment request.

3.3.9 If a User wishes to send a consecutive amendment of a mandate, the User must only do so once the response of the initial amendment request is received.

3.3.10 The User and Paying Bank must keep an audit trail of all amendments to the mandate e.g. changes to collection amount in order to manage queries and/or disputes.

3.3.11 If a mandate amendment request has not been duly authorised or relevant notification issued, then the old mandate must remain in effect.

3.3.12 The Paying Bank is responsible for updating all successful amendment request/s in the mandate register, with the change recorded within the audit log. A history of the authorisation or relevant notification must also be kept.

3.4 Cancellation of a Mandate at the Mandate Register

3.4.1 A Mandate may be cancelled from the Mandate Register at the Paying Bank at any time by the User via its Sponsoring Bank.

3.4.2 The Sponsoring Bank must instruct the User to cancel the Mandate in the event of:

3.4.2.1 Termination of the underlying agreement between the Payer and the Ultimate Creditor.

3.4.2.2 All instances where the Mandate is no longer valid or current.

3.4.2.3 Where a Payment Instruction is returned indicating that an account, for any reason no longer accepts debits.

3.5 Once-Off Mandate

3.5.1 A Once-off mandate may be used:

3.5.1.1 To collect arrears in the lifetime of a recurrent mandate (Fixed, Variable or Usage based).

3.5.1.2 For settlement or larger requested collections from Payer for the recurrent mandate.

3.5.2 Any Once-off mandate must be authenticated.

3.5.3 A Once-off Mandate must obtain a unique Mandate Reference Number.

3.5.4 A Once-off mandate must align to the minimum criteria of a “Fixed Mandate Type”.

3.5.5 The Instalment Amount and Maximum Collection Amount are required to be equal to one another.

3.6 Mandate Suspension

3.6.1 The Payer has the right to request a Mandate suspension against any future dated DebiCheck collections registered against his/her account.

3.6.2 A Mandate suspension suspends the mandate indefinitely. The User must receive notification of this. The User may then seek to resolve the issue with the Payer and may request that the mandate be unsuspended. This action (unsuspend) would have to be authorised by the Payer.

3.6.3 Where a Mandate suspension request is received, the Accountholder/Payer must provide all the details necessary as indicated in Annexure B for the request to be completed by Paying Bank. This information must be made available to the Sponsoring Bank who must make it available to its Users.

3.6.4 On receipt of this request, the Paying Bank must suspend the mandate and not process future Payment Instructions against this mandate.

3.6.5 When the Payment Instruction is returned due to a Mandate suspension Instruction from the Paying Bank, Users may not resubmit future dated Payment Instructions applicable on the Agreement, unless authentication by the Payer has been obtained and the suspension has been lifted.

3.6.6 There is no exclusion period for a Mandate suspension (it is enforced immediately) provided that the Payment Instruction has not been presented.

3.6.7 Mandate suspension must also stop any Payment Instruction/s that is/are already in tracking. This must be effective before the start of the next day’s tracking requests.

3.6.8 Mandate Suspensions must result in a notification to the Creditor Bank and ultimately the Creditor.

3.6.9 If the User does not seek to reinstate the Mandate, or cancel the Mandate from the Mandate Register, the Paying Bank must archive the Suspended Mandate after 13 months.

3.6.10 A Mandate can be suspended by the Payer due to:

3.6.10.1 The underlying agreement between the Payer and the Ultimate Creditor having come to an end (i.e. contract expired or contract cancellation initiated by Payer).

3.6.10.2 A Mandate Amendment that contravened the parameters of Appendix E - Customer does not agree with the revised terms.

3.6.11 A Mandate must be suspended by the Paying Bank:

3.6.11.1 After seven consecutive unsuccessful Collections (not including Tracking);

3.6.11.2 When the Final Collection has been collected.

3.6.11.3 When the Payer’s account is in a state that is unable to accept debits.

3.6.11.4 When the once off Collection has been collected.

3.7 Request for Mandate Information

3.7.1 The User creates a mandate information request with one or more transactions containing the unique mandate reference number/s of the mandate/s. The request is sent to the Paying Bank via the Sponsoring Bank.

3.7.2 The Paying Bank must provide the necessary information to the Sponsoring Bank in the response message and within the timeframes.

4 DEBIT PAYMENT INSTRUCTION RULES

4.1 General

4.1.1 Payment Instructions must be submitted via the Sponsoring Bank to the PSO. The Sponsoring bank that generates the mandate must also submit the collection.

4.1.2 Payment Instructions:

4.1.2.1 Can only be submitted after the Mandate is authorised by the Payer.

4.1.2.2 Must be matched by the Paying Bank against the active Mandate as registered on the Paying Bank’s Mandate Register, and validated.

4.1.2.3 That do not match the active Mandate or fails validation, the Paying Bank will return it with an appropriate message.

4.1.2.4 Must be processed in a randomised manner.

4.1.2.5 May only be re-presented if a Collection was not successful, with exception of a Once off Mandate.

4.2 Collection Amount

4.2.1 Validation is conducted by the Paying Bank based on the payment instruction type received and the Mandate type, these include namely:

• Initial/First Collection

• Recurring Fixed

• Recurring Variable Collection

• Recurring Usage Collection

• Represented Collection

• Last/Final Collection

• Once-off collection/non-recurring

4.2.2 The Maximum Collection Amount must always be known and authenticated by the Payer, and

is:

4.2.2.1 Used for Fixed and Variable Mandates to accommodate arrear interest during representment; where the Maximum Collection Amount cannot exceed 1.5 times the Instalment Amount.

4.2.2.2 Used for Usage Based Mandates and constitutes the agreed Maximum Instalment Amount that may be collected under an agreement between User and Payer.

4.2.3 The rules for validation on collection amount state the paying Bank must allow the transaction if collection amount is less than or equal to:

4.2.3.1 Maximum collection amount (only applicable to usage based and variable mandates)

4.2.3.2 Instalment amount (only applicable to fixed and variable mandates – if present)

4.2.3.3 First collection amount (only applicable to first collection)

4.3 Action Date and Date Adjustment

4.3.1 The Paying Bank must ensure that the Action Date of the Payment Instruction is valid by checking that is conforms to the following rules:

4.3.1.1 If the Date Adjustment Rule is set to “N”, the User is only allowed to collect on Action Date equal to Collection Day or next processing day to cater for non-processing days.

4.3.1.2 If the Date Adjustment Rule is set to “Y”, the User is allowed to set the Action Date to a selected date.

4.4 Returns and Unsuccessful Transactions

4.4.1 If a Paying Bank is unable to process a Payment Instruction to an account, it must return details of the transaction together with the reasons for non-payment to the Sponsoring Bank.

4.4.2 When a Payment Instruction is returned indicating that an account, for any reason no longer accepts debits, the User must not to resubmit the Payment Instruction.

4.4.3 Any Payment Instruction returned as invalid because of system or technical errors may be resubmitted after correction.

5 POST PAYMENT INSTRUCTION RULES

5.1 Payment Cancellations (Recalls)

5.1.1 Payment Cancellations can only be actioned against transactions prior to collection or that are in tracking. This must be effective before the start of the next day’s tracking requests.

5.1.2 Payment Cancellation messages must be batched for single or multiple transactions.

5.1.3 The mandate reference number and the reason for the original direct debit must be included as part of the Payment Cancellation message.

5.1.4 Payment Cancellations may only be delivered to the PSO at a time after the original debits have been received.

5.1.5 The PSO determines if the debits to be cancelled are still at the PSO or if they have been dispatched to Paying Banks:

5.1.5.1 If the debits are still at the PSO, the PSO terminates further processing of the relevant debits (those that match the Payment Cancellation request) and sends notifications of the withdrawn debits to the Sponsoring Bank.

5.1.5.2 If Payment Instructions have been dispatched to Paying Banks, the PSO sends the Payment Cancellation requests to the Paying Bank.

5.1.6 The Paying Bank performs validation against the Payment Cancellations received and the mandate in the mandate register before processing the file against the collections.

5.1.7 Successful and unsuccessful responses to the Payment Cancellation requests are to be provided in the response message to the PSO.

5.1.8 Responses are to be provided to the Users via the Sponsoring Banks.

5.2 System Error

5.2.1 In the event of an error by a Bank after settlement date, the Bank must log a production incident notifying PASA EXO of issue and request reversal of direct debits (collections) in order to correct Bank Errors.

5.2.2 An indemnity must be provided by the Bank initiating the error correction request (as per Annexure D

5.2.3 An Incident as per Business Continuity policy must be lodged on the PASA Website and a communication must be circulated to all other participants advising of the error and the rectification thereof. Payment reversal messages may be delivered to the PSO to reconcile participants once authorisation by PASA EXO is obtained.

5.2.4 Payment Cancellation messages may contain cancellations for direct debits from more than one direct debit input message. The mandate reference number for any original direct debit has to also be included as part of the transaction message.

5.2.5 The customer must be refunded when a Bank Error has been identified and corrected (must include fees and charges associated with transaction). The customer must be put back into a similar position prior to the erroneous transaction being processed.

5.2.6 The Paying Bank must keep an audit of impacted mandates and transactions in the event that a customer attempts to request a dispute on the transaction (resulting from the bank error).

5.2.7 In the event of an incorrect cancellation of mandate/s, the Sponsoring Bank is required to deal these anomalies as an incident report process via PASA EXO.

5.3 Cession

5.3.1 A User may not, without the written consent of the Payer, cede or assign any of its rights in terms of a mandate held by the User to any third party unless: 5.3.1.1 The agreement is also ceded or assigned to that third party.

5.3.1.2 The communication of cession or assignment conforms to the example as in Annexure C.

5.3.1.3 Such cession is communicated to the Payer prior to any Payment Instructions being processed to the account of the Accountholder in terms of the ceded or assigned mandate, as well as the new reference of the contract.

5.4 Disputes

5.4.1 The Payer has the right to make a Dispute Request against any Collection processed against his/her account at his/her Paying Bank.

5.4.2 A Dispute Request is allowed on all mandate types and is initiated as a result of Payment Instruction being processed contrary with the terms of the Mandate (e.g. instalment amount or date field).

5.4.3 Where a Dispute Request is received, the Payer must provide all the details necessary as indicated in Annexure A for the request to be completed by the Paying Bank.

5.4.4 A Dispute Action will be successful if the:

5.4.4.1 Action Date (as per next Business Day rule) does not match the Collection Day; and/or

5.4.4.2 Collection Amount does not equal the Instalment Amount.

5.4.5 In the case of the First Collection, a Dispute Action will be successful if the:

5.4.5.1 Action Date (as per next Business Day rule) does not match the First Collection date; and/or

5.4.5.2 Collection Amount is greater than the First Collection Amount.

5.4.6 All other Dispute Requests involving Action Date and / or Collection Amount will be considered invalid.

5.4.7 If the Dispute Request is invalid (as per the above and reflected in Dispute rules) then the Paying Bank will provide the Payer with the User’s details to enable the Payer to contact the User.

5.4.8 If the Dispute Request is valid (as per the above and reflected in Dispute rules) it becomes a Dispute Action and must be reversed within a maximum of 2 Business Days.

5.4.9 The User must receive Notification of a successful Dispute Action on reversal of funds.

5.4.10 The Sponsoring Bank must monitor Dispute Requests and Dispute Actions lodged against its Users.

5.4.11 Dispute Actions must only be lodged and processed for the full amount that has been processed as per the Payment Instruction and as reflected on the Payer’s account.

5.4.12 No Dispute Request or Dispute Action will be allowed after 12 months from the Action Date of each Collection.

5.5 Fraud

5.5.1 It remains the right of the Payer to lodge a fraud report at the Paying Bank (e.g. the Payer did not authenticate the mandate request, the contract has been paid up or the contract has been cancelled).

5.5.2 The Paying Bank will deal with the fraud report in terms of their own procedures and, if an act of fraud is confirmed, engage with the Sponsoring Bank to obtain a refund for the payer.

5.5.3 The Paying Bank should report the case and the User, which was responsible for the fraudulent mandate, to PASA in terms of the Debit Order Abuse Process. The Debit Order Abuse Process for DebiCheck will be defined after the Pilot Period.

5.5.4 The Payer must be returned to the position prior to the fraudulent act.

APPENDIX A: DISPUTE REVERSAL REQUEST TEMPLATE

Given By: (Name of Accountholder):

(Address):

Bank Name:

Branch Name:

Branch Number:

Account Number:

Type of Account: Current (Cheque) / Savings / Transmission

Date of Dispute:

I/We hereby inform you that the payment instruction indicated in Section A below should not have been effected by you because:

I have authorised the person to issue a payment instruction but the amount of the payment instruction differs from the amount agreed to have been collected; and/or

The payment instruction was made on a date before the amount was due.

I/We therefore instruct you to refund the amount by crediting my/our account indicated above.

Confirmation and Acknowledgement

I/We hereby confirm that this statement is true and acknowledge that if proven otherwise, the person authorised to issue the payment instruction may institute legal action against me/us.

Authorisation

I/We hereby authorise you to provide a copy of this Statement to any person involved in an investigation regarding this dispute reversal.

Signed …………………………………… on this ………… day of …………………………………

…………………………………………….

SIGNATURE AS USED FOR OPERATING ON THE ACCOUNT

…………………………………………………………

ASSISTED BY CAPACITY

SECTION A

FOR OFFICE USE:

Name of User: Payment Instruction Date:

Mandate Reference Number: Agreement Reference:

User Abbreviated Short Name:

APPENDIX B: MANDATE SUSPENSION REQUEST

Branch Number:

Indicate the specific reason for stopping payment on the originating company named above by check the appropriate box:

Contract has ended.

Customer does not agree with the revised terms. Instruction:

Stop all future payments for the mandate indicated above.

The Bank and the undersigned agree to abide by the Rules and Regulations regarding Mandate suspension.

Signed …………………………………… on this ………… day of …………………………………

…………………………………………….

SIGNATURE AS USED FOR OPERATING ON THE ACCOUNT

FOR OFFICE USE:

Mandate suspension entered by: Date: Reviewed by: Date:

Approved by: Date:

APPENDIX C: CESSION TEMPLATE

Agreement of Cession

Entered into between

(Name)

WHEREAS the Cedent has a claim against the debtor (see paragraph 2 below), for monies lent in advance / goods sold and delivered etc. in the amount of R ____________________ (“the Claim”).

AND WHEREAS the Cedent has sold / donated / exchanged the right, title and interest in and to the said claim, to the Cessionary.

NOW THEREFORE IT IS AGREED AS FOLLOWS:

1. Cession

The Cedent hereby cedes, transfers and makes over to the Cessionary all right, title and interest the Cedent has in and to the said claim.

2. Authority

The Cedent hereby authorises the Cessionary to notify the debtor of this cession.

The name of the debtor is

The address of the debtor is

3 Warranty and liability for damage

It is hereby agreed that the Cedent does not provide any guarantee or warranty in respect of the validity of the said claim and shall not be liable to the cessionary for any damages sustained as a result of the said claim proving irrecoverable for any reason whatsoever; or in respect of any fees, costs or charges which may be incurred as a result of prosecuting the said claim.

4 Acceptance

The cession is hereby accepted by the Cessionary upon and subject to the terms and conditions of this agreement.

Signed and dated at ______________________ on this the _______ day of ___________________ 20______ in the presence of the undersigned witnesses.

Witness:

Cedent:

Cessionary:

APPENDIX D: SYSTEM ERROR

Indemnity: Bank System Error Indemnifying Bank: Indemnified Bank:

File Service details (per PCH, select one or more of the following):

EFT Credit	EFT Debit	NAEDO	AEDO	DebiCheck
Indemnifying Bank Account Number: PASA Incident Number:
Indemnifying Bank Account Number: PASA Incident Number:

Bank System Errors to be corrected are attached hereto as annexure A.

Indemnifying Bank:

Herein represented by: ______________________ and ____________________________ in their capacity as: _____________________ and ________________________ respectively, who warrant their authority to act, indemnifies and holds harmless the Indemnified Bank against all:

• direct claims which may arise as a result of the successful correction of Bank System Errors as set out in annexure A, and

• legal costs it may incur in defending or opposing any action taken against it as a result of the Bank System Error provided that, any such action is brought to the attention of the Indemnifying Bank in writing prior to such action being taken.

Indemnifying Bank:

Signature:

Full Name:

Capacity:

Signed and dated at ______________________ on this the _______ day of ____________________ 20______

Acknowledgement and acceptance by the Indemnified Bank:

Signature:

Full Name:

Capacity:

Signed and dated at ______________________ on this the _______ day of ___________________

20______

APPENDIX E: MANDATE AMENDMENT REQUIREMENTS

Data Element	Notification or Re-Authorise with Payer if Amended	Debit Payment Instruction against Mandate
Initial Amount	Re-authenticate	Yes (if provided & different to Instalment Amount)
Adjustment Amount	Re-authenticate	No
Adjustment Rate	Re-authenticate	No
First Collection Date	Re-authenticate	Yes
Collection Day	Re-authenticate	Yes
Date Adjustment Rule Indicator	Re-authenticate	Yes
User/Creditor Abbreviated Short Name	Re-authenticate	Yes
Maximum Collection Amount	Notification	Yes
Adjustment Category	Notification	No
Payer/Debtor Account Type	Notification	No
Tracking Indicator	Notification	Yes
Payer /Debtor Identification	Notification	No
Frequency	New Mandate required	Yes
Contract Reference Number	New Mandate required	N/A
Paying/Debtor Bank	New Mandate required	Yes
Debit Value Type	New Mandate required	No
Mandate reference	New Mandate required	Yes
User/Creditor Name	Dependent - Mandate amendment must be sent by User/Creditor and User/Creditor needs to notify Payer/Debtor	No
Payer/Debtor Account Number	Dependent - Notification if in same Bank else New Mandate Required	Yes
Instalment Amount	Dependent - Re-authenticate if outside adjustment rules	Yes
Sponsoring/ Creditor Bank	N/A - Mandate amendments will be done in bulk by the new Sponsoring Bank/Creditor Bank	No
Mandate Initiation Date	N/A - not a changeable field	No
Mandate Authentication Date	N/A - not a changeable field	No
Message authentication code	N/A - not a changeable field	No
Authentication indicator	N/A - not a changeable field	No
Authentication channel	N/A - not a changeable field	No
Payer/Debtor Name	N/A - User can send an amendment request for the Mandate Database and Mandate Register to be in sync.	No

APPENDIX F: MANDATE TEMPLATE

1. The minimum requirements to be contained in all mandates/contracts are the following:

1.1. Full username (registered name, including trading name)

1.2. Abbreviated name (to enable a payer / debtor to identify who debited their account, i.e.

same included on the Banks statement of the payer / debtor)

1.3. Contract reference number

1.4. 1st Collection date - if required

1.5. Collection date (i.e. if salary date is stated, an indicative date as to when the amount may be deducted from the accountholders account is to be provided)

1.6. Frequency of the Collection (weekly, fortnightly, monthly, quarterly, annually, biannually, and monthly by rule)

1.7. Date adjustment rule

1.8. Accountholder’s details – must contain:

1.8.1 Surname, full name or initial of accountholder

1.8.2 Identity, passport number or temporary residence ID

1.8.3 Their Bank (as paying Bank)

1.8.4 Account number

1.9. Disclosure to the account holder for tracking.

1.10. Explicit authority by the account holder to debit their account (I hereby authorise the Bank to debit my account);

1.11. Consent / authorisation of the accountholder (a wet signature; biometric record, a legally acceptable “electronic signature” and / or voice recorded verbal consent) and the date upon which such consent / authorisation was granted.

2. The further information which is to appear, over and above the information stated above, is set out in respect of each mandate type as follows:

Fixed Mandate

Variable Mandate

Usage Based Mandate

Initial Amount

(i.e. an amount that is not the same as the instalment amount, insert in mandate, if applicable)

Instalment Amount:

the amount is a fixed recurring amount.

Instalment Amount the amount is a predetermined recurring amount (subject to the adjustment category changes).

Instalment Amount: if available, is presented.

Maximum amount:

can be up to 1.5 time greater than the instalment amount.

Maximum Amount:

can be up to 1.5 times greater than the instalment amount (subject to the adjustment category changes).

Maximum amount: must always appear.

Adjustment Category –

Not required to be presented.

Adjustment Category –

refers to the ability of the Creditor (user) to adjust the instalment amount and / or maximum amount: this may be never, quarterly, biannually, annually, when the repo rates changes. Other than when

‘repo rate’ or ‘never’ is elected, one of the following must appear– Adjustment amount (an amount that the instalment and / or maximum Collection amount may be adjusted based on adjustment category) OR

Adjustment rate (a rate that the instalment and / or maximum). Collection amount may be adjusted based on adjustment category).

Adjustment Category –

refers to the ability of the Creditor (user) to adjust the instalment amount and / or maximum amount: this must be never, quarterly, biannually, annually, when the repo changes. Other than when ‘repo rate’ or ‘never’ is elected, one of the following must appear–

Adjustment amount (an amount that the instalment and / or maximum Collection amount may be adjusted based on adjustment category) OR Adjustment rate (a rate that the instalment and / or maximum). Collection amount may be adjusted based on adjustment category).

Collections Vetting Process Overview

Overview of Business Operation

Q Port (PTY) LTD trading as ZAK99 is a registered credit provider. We are providing short term loans.

Compliance with the Industry Abbreviated Name Requirement

PM8@ and / or PM8

PM8@ZAK99

Company Name information

Name: Q PORT (PTY) LTD

Status: In Business

Registration number: 2016/194634/07

Registration date: 11/05/2016

Registered with:

NCR – NCRCP11684

EDO PSSF

New User Take- on and Vetting Process

Objective: To review the new user take-on process to establish whether adequate controls are in place to detect and prevent rogue users from entering the payments system

High Level Process Flow:

When a client applies for a loan, we do a complete vetting process on the client. We obtain the following documents from the client,3 months’ bank statement, 3 months’ pay slip and ID copy. We are doing a credit bureau check on the client and compile an affordability to determine the client’s need. When a client qualifies for a loan, we send him a credit agreement together with the mandate to deduct the funds from his bank account. Once the complete signed credit agreement and mandate is received back from the client, we transfer the funds into the client’s bank account.

Mandate Management:

A written mandate is used.

Mandates are saved both electronically and a hard copy in a secured environment, for the period of 7years.

Ongoing Collections Management

Objective: To review the management and control of transaction processing to ensure compliance with industry requirements.

Ongoing management of the Unpaid and Dispute Collection Process:

The following has been implemented to assist with the management of these areas:

Un-Paid Ratio 10% Maximum

(“Un-paids”, are more commonly referred to as “Failed transactions” in the NAEDO environment)

What process do you follow when a transaction is reported as Un-paid, or Failed? Do you:

- We contact our clients telephonically to discuss the reason for the failure and errors are corrected where applicable. We propose an alternative payment arrangement according to the client’s need. SMS and email notifications are also delivered to confirm this.

- Alternative arrangements are either made to recover arrears outside the normal process or if the arrangement is made to submit a new NAEDO transaction, a new mandate is obtained.

Disputed Collections Management

On a monthly basis the stats are extracted for clients. Those with the higher dispute rates are sent an instruction to provide the following information:

Dispute ratio 0.5% Maximum.

If a dispute occurs, we contact the client to discuss the situation and reason for the dispute. We then try to make an arrangement with the client if possible. Only when an arrangement could be made and a new signed mandate could be obtained, future transactions will be submitted. When no arrangement could be made, no future transactions will be submitted.

Date: ____________________________________

Signed By: ____________________________________

Signature: ____________________________________