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Organisations or service providers who collect funds from customers regularly have been urged to explore Direct Debit to ensure that they have a more efficient way of collecting payments due them from customers.

The Chief Executive of Ghana Interbank Payment and Settlement Systems (GhIPSS), Mr Archie Hesse, who gave the advice, said Direct Debit could help companies reduce the cost in collecting recurring payments from customers.

Organisations such as insurance companies, hire-purchase service providers and utility companies receive money from their customers regularly in the form of insurance premiums, loan repayments, subscription and bills payments.

They are normally paid in cash or cheques by their customers and it is usually cumbersome handling these forms of payments. Cheques are sometimes mixed up or defaced while cash could be pilfered or get missing. There are also reconciliation challenges. But these challenges can be avoided when the Direct Debit is used, experts have noted.

A Direct Debit is an electronic payment that allows an organisation to instruct its bank, asking it to collect an agreed amount from the bank account of a customer on an agreed date.

However, before an organisation could use Direct Debit, it must agree with the customer, so that the customer will always keep its account sufficiently funded to meet the expected deductions.

Mr Hesse said Direct Debit had been very successful in many advanced countries as the preferred form of payment for recurring bills.

It had several benefits to both the receiving companies as well as the paying customers, including allowing such recurring payments to be made automatically on the due date.

It is also safe, convenient and cost-effective for users, as it takes away the hustle of having to make such payments every time they are due.

Mr. Hesse, therefore, encouraged organisations to also take advantage of the existence of such a system in Ghana and use it to their benefit.

Probably, the biggest challenge to Direct Debit is customers keeping enough money in their account to meet their Direct Debit obligations.

Mr Hesse, therefore, advised the public that when they sign up to Direct Debit, they should do well to keep enough money in their accounts on the due dates to meet their payment obligations.

He said the practice where some people signed onto Direct Debit but fail to keep enough funds in their accounts, negatively affected a very good payment system, adding that, such attitudes should be discouraged.

Ghana has had the Direct Debit for some years now and it was introduced to provide alternative channels for making

Accra, April 27, GNA -The Ghana Interbank Payment and Settlement System (GhIPSS) is to step up public education on quicker electronic payment channels to deepen awareness, especially among the unbanked.Mr Archie Hesse, the Chief Executive of GhIPSS, said increased awareness on the quicker formed of payment would encourage the unbanked to open accounts with the banks.

“When the unbanked get to know that they can receive or make payment instantly or within the same day with funds lodged at the banks, it could motivate them to open accounts with the banks,” he said.

According to GhIPSS first quarter Industry Performance patronage for Instant Pay, and express Direct Credit, the two electronic payment channels that enable the banking public to have quicker use of their funds, was on the rise.Instant Pay (GIP) recorded a growth in volume of about 423.9 percent from 24,227 in the first quarter of 2018 to 126,925 transactions.

Express Direct Credit also recorded a growth of 16.5 percent from 162,774 for the first quarter of 2018 to 189,587 transactions for the same period this year. The 16.5 percent growth is significantly higher than the 4.2 percent growth that regular Direct Credit recorded over the same period.Mr. Hesse encouraged banks to also intensify public education on these electronic payment options since it could win them customers.
Instant Pay is an electronic payment system that enables a customer to transfer money from one bank account to another of a different bank and the transfer is effected instantly. Express Direct Credit, on the other hand, enables customers to make or receive payment through their account electronically on the same day through Direct Credit.

Instant Pay and express Direct Credit were introduced to give individuals and organisations the option to make or receive payment quicker than the regular channel. It is also intended to give the public the confidence that their monies at the banks can be accessed and used for urgent payments, without even stepping into the banking halls.

GNA