Copyright © 2012 Introduction to Direct Debit Service EG-ACH Direct Debit.

Copyright © 2012

Introduction to Direct Debit Service

EG-ACH Direct Debit

Copyright © 2012 Egyptian Banks Company

EG-ACH Introduction

The Egyptian Automatic Clearing House (EG-ACH) is a nationwide Electronic Funds Transfer (EFT) network.

EG-ACH processes batches of interbank Credit and Debit transactions.

EG-ACH facilitates a wide range of Customer to Customer (C2C) payments such as salary distribution, supplier payment, governmental payments, pension distribution and many more.

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CBE - Payment and Settlement Systems

In its effort to develop payment systems in Egypt, CBE has established Real Time Gross Settlement (RTGS) system for large

value payments, CBE has assigned EBC with the development of the Automated Clearing

House (ACH) system for Bulk small value payments.

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RTGS

ACH

CCHEGP

ACHUSD, EURO

Mobile

Central Bank of Egypt

BanksBanks 123

EBC Role

CBE Role


EG-ACH Direct Debit Service

Payment scheme governed by EBC to facilitates payment collections.

Permits billers to collect recurring amount due from their customers at their banks by initiating direct debit transaction.

Banks are not responsible for any underlying contract between biller and their customers as it is solely an early collection method.

Based on a written authorization given by customers to biller for the debit of their accounts; this written authorization named Direct Debit Mandate.

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Definitions and Interpretation

Debtor (Customer or Payer)

Creditor (Biller or Originator)

Debtor bank (Customer bank)

Creditor bank (Biller bank)

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Direct Debit Workflow

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Creditor Bank Debtor Bank

RTGS Billers

Company

Individual

Creditor

Debtor

Fund Moveme

nt


Definitions and Interpretation

Mandate Processor: Receives the signed mandate from the debtor, dematerializes the mandate,

archives a scanned copy of the mandate and forwards the electronic mandate information to EBC and send the physical mandate to the debtor bank.

Third Party Processor: Delivers direct debit transactions to EG-ACH on behalf of originator banks.

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What about the Direct Debit Mandate

Direct Debit Mandate (DDM) should be approved by the Debtor Bank prior to direct debit transaction initiation.

EBC has taken the responsibility of providing mandate centralized screening system “Mandate Portal” with following features: Host all direct debit mandates in an electronic form (e-mandate) Screen each direct debit transaction against the respective mandate Allowing the debtor bank to activate/deactivate particular mandate

Mandate Portal: A central hub for mandate business workflow which facilitates collecting and

routing the dematerialized Mandates between the different parties

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Direct Debit Mandate Types

Irrevocable Mandate Irrevocable transactions Payment frequency as per contract terms and conditions Could be canceled based on mutual agreement between Debtor and Creditor

Revocable Mandate Revocable transactions Payment frequency is required (Monthly, Quarterly, Semi-Annual, Annual) Could be canceled upon Debtor request

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EG-ACH Direct Debit - Mandate Form - Irrevocable v3.3.pdf

EG-ACH Direct Debit - Mandate Form - Revocable v3.3.pdf


Direct Debit Mandate Initiation

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Mandate Portal

MandateProcessor

Payer

Biller

Courier

Debtor Bank

Fill Mandate

Acti

vate

ACK.

Send DeliverPhysical Mandate

Dematerializ

e

Arc

hi

ve

Packi

ng


Direct Debit Workflow & Screening

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Creditor Bank Debtor Bank

RTGS

Billers Corporate

Individual

Creditor

Debtor

Fund Moveme

nt

Mandate Portal


Direct Debit Participants

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EBC

Scheme Owner and Operator

Mandate Portal Provider

Third Party Processor

Work on behalf the banks

Send DD transactions

Receive DD transactions

Mandate Processor

Collect mandates

Dematerialize mandates

Archive mandates

DD transaction initiator

Host creditor account

Debtor Bank

Host debtor account

Activate Mandate

Screening

Send mandates to debtor bank

Clearing and Settlement

Creditor Bank


Direct Debit Participants

EBC The scheme owner; defines the rules for the use and certifies parties

participating in the scheme (banks mandate processor and third party processors)

The clearing house Mandate Portal The mandates are checked every time a direct debit is done

Debtor Bank Will debit the account of the debtor when an accepted direct debit occurs

Debtor A debtor is the party whose bank account is to be debited as instructed in a

DDM, typically a customer of a biller. The debtor is able to revoke a direct debit transaction within 180 days after

settlement date for bill payment only, revocation is not applicable for any installment payment.

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Direct Debit Participants (Cont.)

Creditor Bank Will credit the account of the Creditor when a direct debit is accepted and

settled by the clearing house The Creditor bank is liable towards the scheme owner for any revoked

transaction. The Creditor bank has a direct debit contract with the biller

Creditor A biller with a direct debit contract can send a direct debit file to the

creditor bank The Creditor receives from Mandate Processor the mandates which are

accepted by debtor bank The Creditor is liable towards the Creditor bank

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Copyright © 2012 Introduction to Direct Debit Service EG-ACH Direct Debit.

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