What Is a Debit Order? The Money That Moves While You Sleep
Your salary lands on the 25th. By the time you wake up on the 26th, your phone bill, your insurance and your gym membership have already been paid. You did not lift a finger. That small piece of everyday magic is a debit order, and most South Africans have at least one running right now.
Debit orders make life easier, but only when you understand them. Here is what you need to know.
What Is a Debit Order?
A debit order is like a permission slip. You allow a company to collect money from your bank account automatically, on an agreed date, for an agreed amount. Once it is set up, you do not need to remember to pay. Debit orders are commonly used for insurance, medical aid, loan repayments, cellphone contracts and subscriptions.
What Is a Mandate and Why Does It Matter?
The mandate is the agreement behind every debit order. It sets out who can collect, how much, on which date and how often. A company may only collect within those agreed terms, so always read it carefully before you sign.
South Africa’s Most Secure Debit Order
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DebiCheck
You confirm the debit order directly with your bank at the start of the contract, usually through your banking app, an SMS prompt or an ATM. Your bank then checks every future collection against what you approved, which makes DebiCheck the safest option.
How a Debit Order Works
- You give permission by agreeing to the mandate which allows you to have control of what happens on your account.
- The company submits the instruction to its bank on the agreed date.
- Your bank processes the payment instruction and the money is deducted from your account and is paid into the company’s account.
DebiCheck collections run early in the morning, just after salaries are paid.
What Happens If a Debit Order Bounces?
If there is not enough money in your account, the debit order goes unpaid. PASA (Payment Association of SA) estimates that about 1.2 million of the 31 million debit orders processed each month go unpaid. This can lead to a dishonour fee from your bank, penalty fees from the company, and a mark against your credit record that could affect future borrowing.
Simple Tips to Stay in Control
- Keep enough money in your account on debit order dates.
- Check your bank statement every month for deductions you do not recognise.
- Never authorise a debit order you do not understand.
- Manage monthly subscriptions and be aware when opting into auto-renewals
Easy Repayments With Atlas Finance
At Atlas Finance, loan repayments are collected by debit order. You always know when your payment goes off and how much it will be. It is important to be aware of your debit order dates and honour payments as missed payments could affect your credit record, cause any insurance taken to lapse and result in interest being added on for the months of non-payment.
When you are ready, you can apply online at atlasfinance.co.za/apply-loan.
