UAE’s first paperless Direct Debit Marketplace launches today

Direct Debit Marketplace, the UAE’s first paperless direct debit marketplace, has officially launched today.

The platform, the region’s first of its kind, offers payers and merchants a simple and convenient all-in-one solution for recurring payments such as school fees, insurance, rent, gym memberships, and any other subscription-based service.

The Direct Debit Marketplace platform, which is available to organizations that take recurring fees in any industry, is bank agnostic, which means it does not affect the merchants’ relationship with their banking services provider. The platform provides users with peace of mind because direct debits enabled by the platform are integrated with and regulated by the UAE Central Bank. Payers benefit from cancellation control as part of their contractual terms.

Direct Debit is an alumnus of the MBRIF Innovation Accelerator program, which was launched by the UAE Ministry of Finance to foster national innovation.

Commenting on the launch, Fatima Al Naqbi, Chief Innovation Officer at the Ministry of Finance and MBRIF representative, said: “We are delighted to see the launch of Direct Debit, another success story from our Innovation Accelerator programme, where we nurture promising startups that innovate and use technology to disrupt industries. Direct Debit is a perfect example, providing merchants and payers in the UAE with a marketplace where they can transact recurring payments efficiently at low cost. At MBRIF we will continue to align with the UAE’s vision to facilitate innovation and support growth, diversification and excellence in the country.”

Ummair Butt, Founder and CEO of Direct Debit System said, “Writing four cheques for rents or three for school fees are common place in UAE. Our Direct Debit Marketplace app provides residents and citizens with a safe, legal alternative to make all their recurring payments in one place, ideally on a monthly basis.

Butt added, “Monthly payments and avoiding quarterly or bi annual bulk payments means Direct Debit Marketplace can help over 96% of monthly salaried people to stay in control of their finances and out of debt. This is especially important knowing that rents and school fees account for more than 50% of their salaries. 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 & free of charge for payers.” 

A study has shown that allowing customers to pay with their incomings (salary) reduces bounce payments by 41%.

“It is also hugely cost-effective for merchants who currently accept payments through credit cards or cheques. For example, a typical credit card payment would mean merchants pay somewhere between 1-3% of the transaction value. With Direct Debit Marketplace, we offer a fixed fee, regardless of the credit card or bank account, and there is no need to warehouse and process cheques. The Marketplace offers digital reconciliations for all Direct Debit payments, meaning massive cost, time and human resource savings for participating merchants, as existing staff can be retrained to handle business growth.”

Merchants in the UAE can easily integrate Direct Debit Marketplace with their accounting software or use the cutting-edge dashboard. Because the platform is merchant-driven, a payer can only make Direct Debit payments if the biller/merchant first makes an offer. Before signing a direct debit mandate, the app prompts payers to digitally accept a payment offer.

UAEPASS, the UAE’s only secure digital identity, is integrated into the platform. One-time Direct Debit payment setup is only available through UAEPASS, making the entire process paperless. This also means that users will need to download the UAEPASS app on their smartphones and have “signature qualified status” in order to sign a Direct Debit mandate, providing an added layer of security.

Butt added, “Data security is very important for us and the system is hosted in Dubai’s Data Center, known as Dubai Pulse. This makes us DESC (Dubai Electronic Security Center) compliant, with data positioned safely behind government firewalls and systems, which are the best in the world. Direct Debit Marketplace is a Decretal System of the UAE, which means the system is accepted by the national courts. With recent changes to laws related to cheques, both paper-based redundant cheques and new paperless digital direct debits carry equal weight when it comes to the law.” 

The new service is sponsored by National Bank of Fujairah (NBF). Commenting on this development, Vince Cook, CEO at NBF said, “The bank is continually looking to see how emerging technologies can be utilized to improve the services available in the UAE market and we are particularly pleased to be collaborating with the Direct Debit Marketplace. The introduction of direct debit payments is a very welcomed step forward for the UAE banking system. It makes recurring monthly payments much quicker and easier to set up and manage, for both payers and merchants, across a wide range of business sectors.”

“The proposed direct debit framework puts operational integrity and data security at its heart, key considerations for NBF, providing a high level of reassurance ahead of the roll-out of the new app,” added Cook.

Direct Debit Marketplace, which is expected to be fully operational in the fourth quarter of 2022, is now accepting expressions of interest and applications from merchants. Because it is a legal system, all Direct Debit Marketplace merchants must go through a mandatory KYC (Know Your Customer) process, which is carried out independently by Crif Gulf, who represents Dun & Bradstreet in the UAE.