The Chief Executive of Ghana Interbank Payment and Settlement Systems (GhIPSS), Mr Archie Hesse, said, Organisations or service providers who collect funds from customers regularly have been urged to explore Direct Debit to ensure that they have a more efficient way of collecting payments due them from customers.
He also said Direct Debit could help companies reduce the cost in collecting recurring payments from customers,avoid the mix-up of Cheques,and stories on missing money.
Organisations such as insurance companies, hire-purchase service providers and utility companies receive money from their customers regularly in the form of insurance premiums, loan repayments, subscription and bills payments.
They are normally paid in cash or cheques by their customers and it is usually complicated handling these forms of payments,and these challenges can be avoided when the Direct Debit is used, experts have noted.
A Direct Debit is an electronic payment that allows an organisation to instruct its bank, asking it to collect an agreed amount from the bank account of a customer on an agreed date.
However, before an organisation could use Direct Debit, it must agree with the customer, so that the customer will always keep its account sufficiently funded to meet the expected deductions.
According to Hesse, Direct Debit had been very successful in many advanced countries as the preferred form of payment for recurring bills.
The Direct Debit has several benefits to both the receiving companies as well as the paying customers, including allowing such recurring payments to be made automatically on the due date.
He also said the practice where some people signed onto Direct Debit but fail to keep enough funds in their accounts, negatively affected a very good payment system, adding that, such attitudes should be discouraged.
Ghana has had the Direct Debit for some years now and it was introduced to provide alternative channels for making payments, especially recurring ones.