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Introduction to
Direct Debit Service
EG-ACH Direct Debit
Copyright © 2012
EG-ACH Introduction
 The Egyptian Automatic Clearing House (EG-ACH) is a nationwide
Electronic Funds Transfer (EFT) network.
 EG-ACH processes batches of interbank Credit and Debit transactions.
 EG-ACH facilitates a wide range of Customer to Customer (C2C) payments
such as salary distribution, supplier payment, governmental payments,
pension distribution and many more.
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CBE - Payment and Settlement Systems
 In its effort to develop payment systems in Egypt,

CBE has established Real Time Gross Settlement (RTGS) system for large
value payments,

CBE has assigned EBC with the development of the Automated Clearing
House (ACH) system for Bulk small value payments.
Central Bank of Egypt
Banks
RTGS
CCH
EGP
ACH
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Mobile
ACH
Banks
USD, EURO
EBC Role
CBE Role
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EG-ACH Direct Debit Service
 Payment scheme governed by EBC to facilitates payment collections.
 Permits billers to collect recurring amount due from their customers at
their banks by initiating direct debit transaction.
 Banks are not responsible for any underlying contract between biller and
their customers as it is solely an early collection method.
 Based on a written authorization given by customers to biller for the debit
of their accounts; this written authorization named Direct Debit Mandate.
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Definitions and Interpretation
 Debtor (Customer or Payer)
 Creditor (Biller or Originator)
 Debtor bank (Customer bank)
 Creditor bank (Biller bank)
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Direct Debit Workflow
Creditor Bank
Credit
or
 Billers
Debtor Bank
RTGS
Debt
or
 Company
 Individual
Fund
Movemen
t
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Definitions and Interpretation
 Mandate Processor:

Receives the signed mandate from the debtor, dematerializes the mandate,
archives a scanned copy of the mandate and forwards the electronic
mandate information to EBC and send the physical mandate to the debtor
bank.
 Third Party Processor:

Delivers direct debit transactions to EG-ACH on behalf of originator banks.
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What about the Direct Debit Mandate
 Direct Debit Mandate (DDM) should be approved by the Debtor Bank prior
to direct debit transaction initiation.
 EBC has taken the responsibility of providing mandate centralized
screening system “Mandate Portal” with following features:

Host all direct debit mandates in an electronic form (e-mandate)

Screen each direct debit transaction against the respective mandate

Allowing the debtor bank to activate/deactivate particular mandate
 Mandate Portal:

A central hub for mandate business workflow which facilitates collecting
and routing the dematerialized Mandates between the different parties
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Direct Debit Mandate Types
 Irrevocable Mandate

Irrevocable transactions

Payment frequency as per contract terms and conditions

Could be canceled based on mutual agreement between Debtor and Creditor
 Revocable Mandate

Revocable transactions

Payment frequency is required (Monthly, Quarterly, Semi-Annual, Annual)

Could be canceled upon Debtor request
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Direct Debit Mandate Initiation
Biller
Send
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Activa
te
Fill
Mand
ate
Demate Mandate Portal
rialize
Packi
ng
Paye
r
Archi
ve
Mandate
Processor
Debtor
Bank
Deliver
Physical
Courier Mandate
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Direct Debit Workflow & Screening
Creditor Bank
Debtor Bank
Mandate Portal
Credit
or
 Billers
Debt
or
 Corporate
RTGS
Fund
Movemen
t
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 Individual
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Direct Debit Participants
EBC
Third Party
Processor
Mandate
Processor
Creditor
Bank
Debtor Bank
Scheme Owner
and Operator
Work on behalf
the banks
Collect
mandates
Host creditor
account
Host debtor
account
Mandate Portal
Provider
Send DD
transactions
Dematerialize
mandates
DD transaction
initiator
Activate
Mandate
Screening
Receive DD
transactions
Archive
mandates
Clearing and
Settlement
Send mandates
to debtor bank
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Direct Debit Participants
 EBC

The scheme owner; defines the rules for the use and certifies parties
participating in the scheme (banks mandate processor and third party
processors)

The clearing house

Mandate Portal

The mandates are checked every time a direct debit is done
 Debtor Bank

Will debit the account of the debtor when an accepted direct debit occurs
 Debtor

A debtor is the party whose bank account is to be debited as instructed in a
DDM, typically a customer of a biller.

The debtor is able to revoke a direct debit transaction within 180 days after
settlement date for bill payment only, revocation is not applicable for any
installment payment.
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Direct Debit Participants (Cont.)
 Creditor Bank

Will credit the account of the Creditor when a direct debit is accepted and
settled by the clearing house

The Creditor bank is liable towards the scheme owner for any revoked
transaction.

The Creditor bank has a direct debit contract with the biller
 Creditor

A biller with a direct debit contract can send a direct debit file to the
creditor bank

The Creditor receives from Mandate Processor the mandates which are
accepted by debtor bank

The Creditor is liable towards the Creditor bank
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