UAE Central Bank approves paperless direct debit marketplace to ease recurring payments

Launched in September last year, the marketplace is developed by FinTech company Direct Debit System

UAE residents can use the new platform to settle recurring expenditures such as insurance, gym memberships, and any other subscription-based expenses. Bloomberg

The UAE Central Bank has approved a paperless direct debit marketplace to provide payers as well as merchants an all-in-one solution to making regular monthly payments.

Launched in September last year, the marketplace is developed by the UAE-based FinTech company Direct Debit System.

It intends to offer UAE residents and citizens a safe, legal process to make all their recurring payments, including rent, school fees, and other monthly expenses, using a simple, paperless process.

Accessed only through the UAE Pass, all payments facilitated through the platform will be regulated by the Central Bank, Direct Debit System said in a statement on Thursday.

“Since our soft launch in September, we have received incredible feedback from businesses who want to move to the paperless and digital transformation space. Our first merchant is set to accept its first direct debit payment in March 2023,” said Ummair Butt, founder and chief executive of Direct Debit System.

The system is expected to help more than 96 per cent of monthly salaried people to stay out of debt and budget their salaries better, by paying monthly and avoiding quarterly bulk cheques, the company said.

Using the platform, payers can easily settle recurring expenditures such as insurance, gym memberships, and any other subscription-based expenses. The system is Dubai Electronic Security Centre-compliant, with users’ data safeguarded by the government firewalls and systems.

With a fixed-fee structure, it is a cost-effective solution for the merchants who use cheques or credit cards to accept payments. The marketplace issues a digital bounced direct deposit report for merchants who wish to take the bounced payment matter to the UAE courts.

It also offers a sandbox environment to any merchant who wants to test standardised APIs (application programming interfaces) and integrate a direct deposit module into their accounting system.

“Our mission is to encourage a culture of monthly direct debit payments for all big or small ticket items, at very low cost to merchants and free of charge for payers,” Mr Butt said.