RCBC joins BSP-backed direct debit network

MANILA, Philippines — Rizal Commercial Banking Corp. (RCBC) has become one of the first banks to go live on Direct Debit PH, allowing businesses to automatically collect recurring payments from customers even if their accounts are held with different financial institutions.

The Bangko Sentral ng Pilipinas-backed facility is designed to provide an interoperable alternative to post-dated checks and traditional auto-debit arrangements, which often require businesses to maintain separate arrangements with several banks.

Under Direct Debit PH, customers provide a one-time mandate authorizing a biller to debit payments from their bank or e-wallet account on an agreed schedule. The mandate may be cancelled or updated by the customer.

RCBC head of transaction banking group Martin Tirol said the bank’s early participation reflects its push to strengthen its payments and cash management business.

“This is also consistent with our strategy as a payments ecosystem builder, connecting businesses, consumers, and financial institutions through infrastructure that is secure, scalable, and interoperable,” Tirol said.

RCBC is implementing Direct Debit PH through a direct system-to-system connection, allowing recurring payment instructions to be processed automatically.

The facility may be used for recurring obligations such as utility bills, loan amortizations, insurance premiums, subscriptions and installment payments.

“For customers, payments happen automatically on schedule once they authorize a mandate, and they retain full control at all times – including the ability to cancel or update their arrangement whenever they need to,” Tirol said.

RCBC is among four universal banks that participated in the initial rollout of Direct Debit PH, alongside BDO Unibank Inc., Bank of the Philippine Islands and China Banking Corp.

During the BSP’s launch of the facility in July, payments industry officials said another 16 banks, including Metropolitan Bank and Trust Co. and Security Bank Corp., were developing their participation, while foreign banks had also shown interest.

Around 26 banks were already testing or preparing to join the system, with the industry seeking to eventually require more than 120 PESONet members to participate within the next one to two years.

Unlike existing auto-debit arrangements, Direct Debit PH allows the biller and the payer to maintain accounts with different participating financial institutions. This removes the need for companies to maintain multiple banking relationships solely to collect recurring payments.

The service is also free for consumers, with the biller shouldering the transaction cost.

RCBC said the new facility would complement its corporate cash management services covering collections, payments and liquidity management as businesses seek to automate more of their financial operations.