PPMI to Launch Direct Debit Enabling Automated Recurring Payments

The Philippine Payments Management, Inc. (PPMI) is soon to launch Direct Debit, a new interoperable payment capability to enable secure and automated recurring payments across participating financial institutions. This eliminates the need for multiple bilateral agreements between billers.

Direct Debit allows billers such as utilities, insurance companies, lenders and subscription service providers to automatically collect payments from customers' bank or electronic money accounts, subject to the customer's prior authorization through a digital or signed mandate. Once a mandate is activated, payments can be processed automatically on agreed dates helping customers avoid missed payments while allowing businesses to manage collections more efficiently. This new use case serves as a digital alternative to traditional payments such as post-dated checks.

The initiative developed through the collaborative efforts of the industry within the governance structure of the PPMI. Direct Debit was successfully piloted by four participating PPMI member banks, namely: BDO, BPI, RCBC and China Bank, demonstrating the operational readiness of the framework ahead of its nationwide rollout. This framework is already being put to use—BPI and Ayala Land have recently enabled cross-bank auto-debits for property owners and tenants. Read more here.

Direct Debit will initially be managed with the PESONet ACH with the Philippine Clearing House Corporation (PCHC) as the clearing switch operator and settled through the BSP PhilPaSS facility.

PPMI encourages member institutions to participate in the Direct Debit facility either as a collecting or paying institution. Additional information and onboarding materials are available on the PPMI website at https://www.philpayments.org.ph/directdebit.

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