We are all accustomed to using debit orders for various reasons, for example: Netflix fees, gym memberships, internet monthly usage and store credit accounts. It is important to consider whether the instructions we provide for these debit orders electronically are legal, valid and enforceable by the merchants and banks.

In essence, a debit order is an instruction by a customer to a third party to allow the third party to collect a payment from the customer’s account on a regular basis (e.g. monthly or annually). The customer can choose whether it will be a fixed amount (e.g. a fixed monthly fee) or a variable amount.

Any merchant who wishes to use debit orders must obtain a written authority (the debit order mandate) from the customer before any transactions can be processed through the debit order system. A valid debit order mandate is proof of consensus between a customer and merchant for the repeated deduction of the agreed amount from the customer’s bank account. A merchant would request payment from the customer’s bank, based on the authority from the customer.

The Payments Association of South Africa (“PASA”) is recognised by the South African Reserve Bank as the Payment System Management Body under the provisions of the National Payments System Act 78 of 1998. PASA manages, governs, and controls all matters affecting interbank payments, payment clearing and settlement within various legal constructs.  All the major banks are members of PASA.

The PASA EFT Debit Payment Clearing House and NAEDO Payment Clearing House Rules require that debit mandates must be in writing or voice recorded when doing a phone call with the customer.

Voice-Recorded Debit Order Mandates

A voice recorded mandate means that the customer provided his/her consent for the debit order to the merchant telephonically. The merchant in possession of such voice recorded mandate will then have the ability to initiate payment instructions.

The PASA rules require that such a mandate must conform to the following minimum requirements:

  1. Certain details must be captured during the call, including the beneficiary’s name, call centre name, contact telephone number, contract reference number, date, action date, bank particulars, surname and initials of customer and the amount that will be deducted.
  2. The voice recorded mandate must be confirmed to the customer in writing within 30 days of the recording of the mandate and prior to any debit payment instructions being processed to the account of the customer.
  3. A customer must be made aware of the fact that his/her voice is being recorded and that the recorded message will be accepted as the official authority to debit.
  4. A customer must be made aware of the unique contract reference and abbreviated short name to be reflected on the customer’s bank statement.
  5. Recording devices must be reliable and with acceptable acoustic quality (preferably SABS approved).
  6. The recorded messages must be properly indexed for easy accessibility to promptly deal with enquiries and disputes.

Although voice recorded mandates are valid mandates, banks will not become involved with any process to prove the existence of voice-recorded mandates to accountholders for the purpose of resolving disputes.

Can a Written Debit Order Mandate be in Electronic Form?

Electronic debit order mandates are deemed to be valid mandates if they comply with the Electronic Communications and Transaction Act 25 of 2002 (“ECTA”).  In terms of section 12 of ECTA, the requirement in law that a document or information must be “in writing” is met if it is in the form of a data message and accessible.

A “data message” is defined as data generated, sent, received or stored by electronic means and includes a) voice, where the voice is used in an automated transaction; and b) a stored record.

The requirement for the retention or storage of information is set out in section 16 of ECTA and states that information stored in the form of a data message must be accessible; in the format in which it was generated, sent or received; and the origin and destination of that data message and the date and time it was sent or received can be determined.

Based on this, for a merchant to use a valid electronic debit order mandate, a proper record must be retained. This record must preserve the mandate given by the customer in a form that is accessible, and it must accurately reflect the information provided by the customer (with origin and date and time stamps).

Must an Electronic Debit Order be Signed?

To determine whether an electronic debit order mandate must be signed, we must consider both the PASA clearing rules and the merchant’s bank’s user manual or operational guide.

The PASA clearing rules do not require a signature for a debit order mandate to be valid.

Most of the major banks’ user manuals require the debit order mandate to be signed, BUT it does not exclude an electronic signature for this purpose.  Most of the banks merely require that there must be a radio button to accept the authority to debit the account and that a confirmation of the mandate must be submitted via email to the customer.

A radio button is a tick box in the mandate that allows the user to choose only one of a predefined set of mutually exclusive options. For example:



The default selection should be “reject” so that the customer has to apply his/her mind to accepting the debit order mandate.

ECTA goes further in section 13(2) to make it clear that a regular electronic signature “is not without legal force and effect merely on the grounds that it is in electronic form”.

It is not clear whether a radio button should constitute signature or be an alternative for it. In this case section 13(5) of ECTA reads as follows:

Where an electronic signature is not required by the parties to an electronic transaction, an expression of intent or other statement is not without legal force and effect merely on the grounds that –

(a)         it is in the form of a data message; or

(b)         it is not evidenced by an electronic signature but is evidenced by other means from which such person’s intent or other statement can be inferred.

If the radio button is to be considered an electronic signature, then use of a radio button is sufficient. However, if a radio button is NOT considered a signature, then it still constitutes an “expression of consent” as contemplated in section 13(5) of ECTA.

Summary of Legal Requirements

Although the legal requirements for obtaining a valid debit order mandate have to be considered in terms of the PASA clearing rules and the merchant’s relevant bank’s user manual, in summary, the minimum legal requirements are that:

  • a merchant must obtain a “written” or voice-recorded debit order mandate from its customers;
  • the voice-recorded mandate must conform to the requirements listed above;
  • the written mandate can be in pen and ink on paper or in electronic form;
  • the mandate must be signed, and a copy provided to the customer; and
  • in the case of online electronic mandates, the customer can agree or “sign” by way of an electronic signature or a radio button as described above. Record of this acceptance must be kept by the merchant.

For more information and a more detailed look at your specific bank’s requirements, feel free to contact us.