ACH Direct Credit suitable for bulk payments – GhIPSS
Institutions are being urged to use Direct Credit payment for bulk disbursement of funds such as salaries.
This is because it enables funds meant for different sets of people to be disbursed quickly and with ease.
Archie Hesse, Chief Executive of Officer of Ghana Interbank Payment Settlement Systems (GhIPSS), explained that the Direct Credit is very convenient and efficient as the process was not cumbersome.
He urged both public and private organisations which were not yet using Direct Credit for their bulk disbursement of funds to do so.
Direct Credit which was one of the two forms of Automated Clearing House (ACH) was a simple, secure and reliable service which enabled individuals, large and small organisations to make payments by electronic transfer directly into a bank account.
It involved a debit to an account in the sender´s bank and a transfer of the amount of money directly into the beneficiary´s account in another bank.
The electronic nature of the Direct Credit makes disbursement of bulk funds quicker, safer, more secure and requires less effort and saves time. It also enables intended recipients to receive their funds on time.
Direct Credit can be used for payment of salaries, pensions, welfare benefits, commissions, supplier payments, dividend and refunds. It is also suitable for interest payments, government payments, as well as business-to-business payments.
Mr Hesse explained that with the electronic payment system, it was easy to trace all payments made.
He said even if the intended recipients of the funds saved with different banks, funds disbursed would hit the respective accounts about the same time.
Mr. Hesse added that payments made through Direct Credit hits the accounts of the recipient the next day or the same day if Express Direct Credit was used.
He said in cases of emergency, the Instant Pay could be used.
“There are options for each situation and so the banks should educate their customers to use these more efficient and secured forms of payments,” he stressed.
He also entreated banks to set up systems that would enable their corporate customers to send files electronically to them to make bulk funds disbursement seamless.
Direct Credit is one of the initiatives introduced by the national payment infrastructure provider, GhIPSS.
Last year, almost five million Direct Credit transactions worth GH¢16.5 billion were undertaken.
Between January and June this year, a total of about GH¢9.4 billion from about 2.7 million transactions took place compared to 7.6 billion cedis from 2.3 million transactions for the same period last year.
This represents an increase of 23.3 per cent in terms of value and 15.6 percent in terms of volume for the half year.
Before the introduction of Direct Credit, such bulk disbursement of funds was done mainly through the Real Time Gross Settlement (RTGs), however Direct Credit is a more appropriate payment system for such interbank transactions.
This is because Direct Credit is an entirely electronic payment system which provides a thorough audit trail and it is quicker and safer. But the RTGs is partly manual and could be cumbersome and sometimes error ridden. RTGs also limit ability to provide an audit trail along the entire chain of transaction.
Source: GNA