Direct Debit System launches a paperless platform in the UAE

Some of these recurring payments include school fees, rent, gym memberships, insurance, and other subscription-based services. The platform is available for organisations that take recurring fees in any business sector, and it does not affect the merchants’ relationship with their banking services provider.

Also worth noting is that the UAE Central Bank integrates and regulates any direct debits facilitated through the platform. 

Direct Debit System was created as part of the MBRIF Innovation Accelerator programme, which was launched by the UAE Ministry of Finance to support nationwide innovation. The UAE-based fintech’s recurring payments platform integrates with the applications businesses use every day, giving businesses more visibility over payments and saving them time on tasks such as payment reconciliation.

The Direct Debit Marketplace is expected to become fully operational in the fourth quarter of 2022 and is now accepting expressions of interest and applications from merchants.

Official representatives from MBRIF cited by gulfbusiness.com described the marketplace as a place where merchants and payers in the UAE can transact recurring payments efficiently at a low cost.

In turn, Direct Debit System officials cited by the same source stated that the Direct Debit Marketplace can help over 96% of UAE-based monthly salaried people to stay in control of their finances and out of debt.

They also revealed that the solution is advantageous for merchants who currently accept payments through credit cards or cheques. While a  typical credit card payment would mean merchants pay somewhere between 1% to 3% of the transaction value, the Direct Debit Marketplace has a fixed fee, regardless of the credit card or bank account, and there is no need to store and process cheques.

How does the system work?

UAE-based merchants can use their accounting software to connect directly with the marketplace, or they can use the solution’s own dashboard. 

Since the system is merchant driven, a payer can only make direct debit payments if the biller makes an offer first. Moreover, payers must digitally accept a payment offer before the signing process of a direct debit mandate begins. 

The platform is integrated with UAEPASS, the UAE’s only secure digital identity, and it is sponsored by the National Bank of Fujairah (NBF). One-time direct debit payment setup can be done through UAEPASS exclusively, which makes the entire process completely paperless.