Basic Terminology
Credit and Debit Payments
EFT credit payments are those in which a payer issues a payment instruction to actively transfer funds into the receiver’s (payee's) account. The payer initiates the transaction and actively ‘pushes’ funds from their account into the receiver’s account.
Credit
An example of a credit payment would be a consumer buying goods online. Before the goods can be confirmed for delivery, the consumer must make payment. The consumer authorises a once-off payment using their banking app, and sends the money to the online platform.
EFT debit payments are those in which the receiver issues a payment instruction for a pre-approved amount to be transferred from the payer’s account into the receiver’s account. The receiver initiates the transaction and ‘pulls’ funds from the payer.
Debit
An example of a debit payment would be a consumer’s debit order for a mobile phone contract. Each month, the mobile provider pulls money from the consumer’s account. The consumer does not need to take any action, but is still effectively paying the mobile provider.
Inbound and Outbound Payments
We define an inbound transaction as one in which an industry bank initiates a transaction that will ultimately be processed by you. This could be:
- A credit payment, whereby an industry bank pushes funds into an account held at your bank.
- A debit payment, whereby an industry bank initiates an instruction to pull funds from an account held at your bank.
We define an outbound transaction as one in which you initiate the transaction. This could either be:
- A credit payment, whereby you push funds from your bank to an industry bank.
- A debit payment, whereby you initiate an instruction to pull funds from an account held at an industry bank.
Originating Bank and Homing Bank
The originating bank is the bank from which the transaction is initiated; the bank that issues the payment instruction, whether it is for a credit or debit payment.
The homing bank is the bank at which the payment is actioned; the bank that holds the bank account into which credits are made or from which debits are pulled.
Note
Your role can be that of either the originating or the homing bank depending on whether you are initiating or actioning the payment.
Clearing and Settlement
EFT clearing refers to the process whereby transactions are validated, account numbers pass check digit verification, and limits are verified by all entities involved in the line of processing. Electrum can finalise clearing of an inbound payment on behalf of the bank on the processing day (and then only pass the transaction to the core banking system on the relevant action day).
Settlement refers to the interbank settlement of the banks' South African Reserve Bank account entries, as initiated by BankservAfrica, which takes place on the action day of a transaction. In simple terms it means that all payment obligations between payer and payee have been finalised.
Action Day and Processing Day
The action day is the first day on which the transaction may be effected against the customer’s account, and the day on which the transaction is settled between the banks' accounts by BankservAfrica. It is the day on which a customer actually receives money into their bank account in the case of a credit, or when an account holder has money leave their account in the case of a debit.
The processing day is the day on which messages and files are exchanged between the banks and BankservAfrica. Note that BankservAfrica is not available for processing all the time – for example, it is not open for processing at all on Sundays. Therefore if a customer initiates an outbound EFT payment on a Sunday, then their bank may start processing the EFT on the Sunday, but may only send the transaction file to BankservAfrica on the Monday. Thus Monday is the processing day in this case. See also processing windows.
Check Digit Verification (CDV)
Check digit verification is a procedure used to check that a bank account number conforms to the rules set by a given bank.