Dubai-based direct debit facilitates the process of budgeting for quarterly and semi-annual payments

“Quarterly or semi-annual checks for rent and / or tuition are a huge problem for a monthly wage earner to budget. “In this statement, the fintech startup DebitThe founder and CEO of Ummair Butt sums up the sole reason behind the creation of the platform.

Debit

Launched in 2017, Dubai-based Direct Debit is an online avenue that allows merchants and payers to use a paperless system for recurring payments such as monthly rent, tuition, utility bills and loan repayments. Butt’s initial statement may be a sentiment many of those reliant on monthly pay also share. Budgeting for lump sum payments, such as house rents and tuition, using post-dated checks can often be tedious. But with direct debit, users can opt for monthly direct debits, which are easier to book, instead of using post-dated checks. “The idea behind it came about when I noticed that every September I had a pretty big tuition check, coming out with my quarterly rent check,” Butt recalls. “As a monthly paid person, that would push me to use a credit card and then another struggle ensued to be in control. I then decided that a service that aligns monthly outgoing and monthly incoming cash flows would help the general population, as well as traders and homeowners.

The direct debit offers are pretty straightforward. Using a single connection to the direct debit platform, users can ensure that they are paying their major bills and fees in monthly installments. Login can be done directly using the UAE PASS app, which is the national digital identity and signature solution that allows users to identify themselves to government service providers across the UAE through a smartphone authentication. “As checks are no longer a security tool by law, we offer an effective alternative to merchants and payers,” says Butt. “Research also shows that, if they are allowed to pay monthly, bad payments are reduced by 41%. So it’s a win-win for everyone!

Source: direct debit

With direct debit, users can also manage and track past payments and plan for future ones. The platform’s user-centric approach is evident in the way it sends email and SMS alerts ahead of each payment’s due date. These online transactions, between the user and the merchant, therefore constitute the primary source of income from the direct debit. “Our business model is to ensure that the cost savings are passed on to merchants who want to transform their businesses to digital / paperless and at the same time payers have to pay monthly instead,” says Butt. “The platform will remain free for payers, but merchants will pay per transaction, making it a variable cost.”

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It should be noted here that the direct debit has been supported by the UAE government itself. As a business regulated by the Central Bank of the UAE, direct debit enables the majority of UAE banks to provide consumers with a paperless way to manage payment transactions. “We host our system and our merchant / payor data in a private government-provided cloud, which means the data on our platform is as secure as any government entity,” Butt adds. “It also means that we are compliant with the Dubai Electronic Security Center. For merchants, we also offer end-to-end automation, which includes, but is not limited to, accounts receivable transformation or bank reconciliation functions as well as electronic contracts. Indeed, it is this automation service that the direct debit offers to merchants that constitutes another source of income for the startup. “While the primary driver of our revenue remains transactions, we also provide end-to-end automation services that involve the integration of merchant financial systems with our platform, which in turn provide us with second source of income and also allow traders to invest. ”Says Butt.

Amid all the digital disruption that direct debit professes, Butt says the platform has a human component to it as well. “We will always make sure that there is a phone number available and that there is someone on the other end to answer for both sides of our market,” he says. “Our partners and users will find us a physical partner.” } Having generated almost AED 1 million in revenue so far, direct debit is now set to launch a paperless market in 2022. Notably, this will also be accessible through UAE PASS. “So far, we’ve raised AED 1.5 million in two funding rounds, which has helped us develop a market that will launch in January next year,” Butt said. “We also aim to grow into an AED 100 million company over the next three years through our regulatory approval and market expansion to Bahrain, Qatar, Saudi Arabia and Pakistan. “

Being selected to be part of the Mohammed Bin Rashid Innovation Fund (MBRIF) accelerator program has thus strengthened Butt’s ambitions for direct debit. “Since our selection we’ve had an amazing trip, which included a lot of education and guidance,” he says. “The whole group of fellow startups, mentors, as well as the MBRIF team, now feel like an extended family. It’s always nice to have family around, and for us that means MBRIF.

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