Authenticated Collections Update

SAFARI into Consumer Credit

by Riaan de Swardt

15 October 2014

SARB Terms of Reference (TOR)

• Issued on 3 July 2013• Based on the overwhelming support by the collections

industry for the enhancement of the current AEDO system, as opposed to the development and implementation of an ACT-type system, the NPSD resolved that the current AEDO system must be enhanced.

• The NPSD requires PASA to initiate and mobilise a project team of experts drawn from the stakeholders in the collections environment, ie. banks as well as non-banks who are able to technically and legally design, develop and implement the industry's preferred solution, namely the enhancement of the current AEDO system.

April 19, 2023

SARB Terms of Reference (TOR)

• The solution must address the NPSD's minimum requirements and be implementable across the industry within the shortest time possible.

• The enhancements will focus on sound flexible mandates and authentication that meet an industry accepted standard, and can be developed and implemented across the board.

April 19, 2023

SARB Letter 24 July 2014

April 19, 2023

Simplified Processing HierarchyThe SARB has no objection to the simplified processing hierarchy… subject to the condition that the end state does not include any non authenticated debits being processed in the early window. In the end state, the TOR envisages the processing of NAEDO and EFT debits after the AC/AEDO debits…

SARB Clarification Letter 25 August 2014

“…AC, AEDO and NAEDO Processing:• Only AC and AEDO transactions may be processed in the early processing window

from the end state (June 2017)• No NAEDO transactions will be processed in the early processing window in the

end state, nor any other non-autenticated transactions• The 24 month timeframe, comprising of the agreed upon assessment/evaluation

period and migration period, commencing from the June 2015 implementation date, does not imply that the AC implementation may be delayed.

• Upon commencement of the second 12 months (June 2016), no new NAEDO contracts may be initiated for processing in the early processing window.

• NAEDO processing may however be considered in the non-authenticated debits space, after the early processing window has concluded”

April 19, 2023

PROCESSING OF AC TRANSACTIONS -Final

Typical Deduction DayD

A

Y

1

D

A

Y

2

00H00

NET

SALARY

CRED ITS

00H10

AC1ST

RUN

05H10

DATA

BANKS

14H00

AC

2ND

RUN

19H00?

EFT

DEBIT

ORDER

1 RUN ONLY

05H00

AC

FULL

TRACKING

06H00

DATA

TO

ENDUSERS

07H00?

NON

AUTHENTICATED

Clarification: Authentication

Authentication means:• Customer verification by the Paying Bank• Account validation by the Paying Bank• Mandate authorisation by the Customer• User / Originator verification by the Acquiring

Bank

April 19, 2023

Clarification: Enhanced AEDO Changes…• Enhanced AEDO

– Variable Amounts– Specify Bank Account details

• Ability to have a once off change of reference number (Application to final contract number)

• Decentralised mandate databases housed with banks and CSP’s

April 19, 2023

Clarifications: AEDO vs AC

Determine if AEDO could be enhanced to meet the Criteria for the Authenticated Collections environment.

If AEDO could not meet the Authentication Criteria it would be designated to the Authenticated Collections and processed early.

April 19, 2023

10

5. AC : where are we?

11OPERATE SUPPORT

OPERATE

LEARN

Project Roadmap (28 Aug2014)

Initiation Execution

SARB TOR

Definition

INTERPRETATION OF SARB TOR

PROJECT MANGEMENT PLAN

APPROVAL

15 N

ov 1

3

28 A

ug 1

4

TRS FRAMEWORK APPRROVAL

IMPLEMENTATION PLAN

DEVELOPMENT

TESTING PHASE

TRANSITION / MIGRATION

INDUSTRY READY

21 O

ct

14

13 O

ct 1

4

30 J

une

15

Design Development Validate Implement

BRD APPROVAL (WORKGROUP)

TRS FRAMEWORK DEVELOPMENT

IMPACT ANALYSIS

TRS DEVELOPMENT

TRS APPROVAL(WORKGROUP)

JUSTIFIED FEEDBACK TO

SARB

EVALUATION / STABILIZATION

SINGLE HIERARCHY

07 A

pr 1

5

30 J

une

1630

Jun

e 17

UPDATED SID

BRD RATIFICATION (STEERCO)

02 O

ct

14

08 S

ept

14

TRS RATIFICATION (STEERCO)

“4 potential use cases”

12

SA “SECURE

DEBIT”

USE CASE: TT1

• Transaction Type 1:- • Non-face-to-face• Authentication key not included• Request online• Response 15 minutes / end of business day

(Clearing Rules will determine)

April 19, 2023

USE CASE: TT2• Transaction Type 2:- • Non-face-to-face• Authentication key not included• Batch request day 0 queued by BankServ until

20H00• Day 1 from 08H00 send to payers for

authorisation. Replies received batched and returned.

• Final Batch responses Day 3 08H00 April 19, 2023

USE CASE: TT3

• Transaction Type 3:- • Face-to-face• Authentication key included• Card, PIN, Secure POS• AEDO and Enhanced AEDO• Request online• Response online

April 19, 2023

USE CASE: TT4

• Transaction Type 4:- • Non-face-to-face• Payer required to pre-register• Authentication key included (after pre-

registration)• Request online and response online• Optional: Only ABSA & Standard Bank

15 October 2014

17