Why debit orders fail in South Africa

A debit order lets a business collect money from a customer's bank account once the customer has given permission. The Payments Association of South Africa (PASA), the body recognised by the Reserve Bank to manage the payment system, notes that debit orders are widely used to collect monthly premiums on life policies. When one comes back unpaid, the reason matters, because each reason needs a different response.

Three kinds of debit order

PASA describes three debit order types in South Africa.

• DebiCheck: the customer approves the debit order with their own bank, once, at the start of the contract. The bank keeps the approved mandate (the customer's permission and its terms).
• Registered Mandate (RM): launched on 12 May 2025 to replace the older Registered Mandate Service. The mandate is registered at the customer's bank, but the customer does not approve it in real time.
• EFT debit orders: the oldest type. The collecting business holds the mandate, and the bank does not check collections against it.

The collecting business chooses which system to use, not the customer.

The account cannot pay

PASA defines an unpaid debit order as one that is not completed for reasons "such as insufficient funds, account closed, account blocked, etc." The customer's bank decides the reason and sends back a code.

Timing plays a big part in insufficient funds. According to PASA, DebiCheck collections run first, in the morning straight after incoming payments are processed, "often after the salary run". RM collections run in the evening, and EFT collections run later that evening. DebiCheck and RM can keep looking for funds for up to ten days and collect if money arrives. EFT debit orders have no such tracking, so if the money is not there on the day, the collection simply fails.

Dates also move. If the agreed date falls on a weekend or public holiday, PASA says the collection may happen on the business day before or after.

Some failures cannot simply be retried. Netcash, a payment service provider, tells its clients that collections returned as "account closed" or "payment stopped" cannot be resubmitted, and that a collection returned for no funds on two consecutive collection dates must be removed until a new mandate is received.

DebiCheck: when the mandate does not match

With DebiCheck, the bank checks every collection against what the customer approved. If the details match, the payment goes through. If not, the bank rejects it.

This catches insurers out when something changes. PASA says that if the payment date or amount changes, the customer may need to approve the debit order again, and may decline. A premium increase can therefore cause a failed collection even when the customer has money. Customers can also suspend a DebiCheck mandate with their bank. The collecting business is notified at that point, but the suspension does not cancel the policy itself.

Disputes and reversals

A customer can ask their bank to dispute a debit order they believe was unauthorised or invalid. Since 13 April 2026, the dispute window for EFT, DebiCheck and RM debit orders is 60 calendar days from the day after the collection, a change approved by the Reserve Bank and the Financial Sector Conduct Authority (FSCA). PASA notes that reversals are not automatic, and that collections under an approved DebiCheck mandate "cannot be unfairly disputed". For EFT debit orders, PASA says banks reverse disputed debits without deciding whether they were valid.

Read the reason before you react

A "no funds" return calls for a reminder and an easy way to pay before the grace period ends. A closed account needs new bank details. A dispute or suspension needs a conversation about whether the policyholder still wants the cover. Treating all three the same wastes the short time available.