Setting up a debit order ensures that you don’t miss any payments and have proof of payment should any problems arise between you and your service provider.
But this convenience comes at a price. Banks will charge for every transaction that occurs in your account, and debit orders are not spared.
Justmoney compared debit order prices across the big South African banks to help you save money.
A debit order is an agreement between you, the account holder, and a third party – that is the beneficiary user – where you provide the third party authorisation or a mandate to regularly debit your account.
Banks are not directly involved in negotiating the debit order. However, the bank will charge a fee for every debit order that is processed, disputed, reversed, dishounered (bounced), cancelled, or stopped.
The fees are different across the banks and it’s up to you to choose a service provider and a product that matches your needs and pocket.
*The information below was correct at the time of publishing this article.
|ABSA||Capitec Bank||Standard Bank||FNB||Nedbank|
|Internal debit orders||R0||R0||R4.50||R2.50||R0|
|External debit orders||R9 – R19, depending on your account||R3.50||R5.50 – R18, depending on your account||R4.20 – R19, depending on your account||R5.50 – R18, depending on your account|
|Debit order dispute||Free online
R30 in the branch
R145 after 40 days
|R5 on app
R40 in the branch
R80 after 40 days
|290 after 40 days||R8.50||R5.00|
|Dishonoured debit order||R6.35 – R50, depending on your account||R6.00||R0-R147, depending on your account||R20 for each of the first 4 debit orders. R120 for the 5th debit order||From 10.00 to R150, depending on your account|
|Stop payments||R30 online
R65 in the branch
|R6||R60||Free when done digitally.
R25 when done telephonically.
R75 when done in the branch.
From the table above, it’s clear that Capitec bank leads with the most affordable debit order prices when compared to other banks. However, many banks offer a wide range of products. Ask your service provider if you can’t open an account that has more affordable fees.
Switch your debit orders
If you feel that your bank is ripping you off, there’s always the option to move your debit orders to another bank.
Most banks assist new clients to switch debit orders to their new bank account. You can provide a bank statement that contains the debit orders and select which debits must be switched.
The new bank will use the payment information on the statement to identify and notify the service provider of the new bank details, says Francois Viviers, executive of marketing and communications at Capitec.
The service providers will then update the mandate information in their records with the new account number and will collect from the new bank account.
What about unauthorised debit orders?
You can initiate a dispute and stop unauthorised debit orders.
The cut-off period to dispute debit orders is 40 days after it has been presented, says Omar Baig, head of transactional products and everyday banking at Absa.
Debit orders that are disputed 40 days after they have been presented follow a different manual process which can take up to 30 days to conclude, he explains.
He says that each dispute has to be investigated individually to confirm whether a valid mandate exists or not before the transaction can be reversed.
The unfortunate part is that you will pay for every debit order reversal.
Ensure that your account always has funds
It can be tempting to withdraw all the money in your account or move it to another account to avoid debit orders, especially those that are unauthorised. However, this can be detrimental to your finances as you will incur extra fees.
It’s vital that you ensure that sufficient funds are available to cover the debit order amount, says Baig.
If there are insufficient funds in your account at the time when the debit order is processed, then the debit order will be returned as unpaid and you may incur additional fees, he adds.
Avoid unauthorised debit orders
Another way to cut the cost of debit orders is by avoiding unauthorised debit orders. Vigilance starts even before a debit order has been presented.
Baig says you must keep your account details, including your bank statements, safe and not share them with anyone you don’t wish to do business with.
If you stay informed of each activity on your accounts, you can act as soon as you have identified something suspicious.
Unfortunately, syndicates and fraudsters have ways to get account information that they use to create debit orders. This is why the DebiCheck system was created.
According to Viviers, this is a process where the payer must acknowledge or authorise the new mandate via the payer’s bank.
You will receive a notification when a request is initiated to load a debit order on your account, and you can then approve or decline this request.
DebiCheck is still in the implementation phase, but once it’s established, it will give you more protection regarding new contracts and payments.