Success assumed after 5-days

Debit order payments are automatically marked as successful if there has been no response within 5 calendar days.

Debit orders in South Africa behave differently to how one would expect payments to happen. Typically, one would expect the bank to attempt a collection from the end-customer, and when that’s successful, they’ll let you know that the money has been received.

How debit orders work is a bit different. When sending a collection instruction to the bank, the bank immediately (on the action_date) assumes that the collection was successful, and allocates the funds to your merchant account. Then, as the payments are being processed over the next few days, “reversals” are actioned for the payments that actually ended up failing. Even a customer account with insufficient funds will first result in a successful collection, and then subsequently be reversed. This means that on the action_date, it would at first seem like all payments succeeded.

The vast majority of primary errors, such as “account does not exist” or “insufficient funds” result in reversals being actioned within about 3 days from the action_date. There is however still a long-tail of months, sometimes 6 months, that a customer can dispute a payment and have the bank reverse it.

To account for this delayed notification mixed with a long-tail of issues, the industry norm has developed whereby payments that have not been reversed after 5 days, are assumed to be successfully collected.

Root takes this convention into account by treating reversals on debit orders before 5 days differently from reversals on debit orders after 5 days from the action_date. The action_date is included as one of the calendar days.

1. Reversals before 5 days will update the original payment to a failed status.
2. At the 5-day mark, if there were no reversals to fail the payment, Root will automatically update the payment to a successful status.
3. Reversals after 5 days will be treated as conventional reversals, with a new reversal payment being created. Read more on payment reversals.