Introduction to Debit Collection Initiation

Debit Collection (DB) application is an integral part of the Temenos Transact core banking suite. It allows Direct Debit (DD) request to perform the following for Temenos Payments in its role as a payment processing engine:

• Capture DD requests (manually)
• Interface with customer facing systems and electronic bank channels to receive DD requests
• Validate and pre-process DD requests
• Route the DD requests to Temenos Payment (PP) system

The DB application can act as a customer facing channel for end users to enter collection requests. It can also be exposed as a Restful API for channels to consume. The application can interface with a variety of Payment Initiation (PI) channels in interactive and Straight-Through Processing (STP) mode. The initiation channels has the following to raise a collection request:

• Customer facing channels
• Electronic feeder channels (STP)
• Bank’s branch
• In-house bank host systems

DB supports capturing collection request for different types of clearings, such as Automated Clearing Houses (ACH) and Instant Payments. It supports only creation and capture of single DD collection requests. DB does not deal with inward collection processing (that is, collection requests initiated in another bank and received in DB bank through clearing or bilateral partner bank).

DD.DDI module of Temenos Transact provides the framework to:

• Receive DD collection requests from other Temenos Transact applications (such as AA)
• Forward or send the requests to Temenos Payments or external system (using a pain.008 file), respectively

Architectural Diagram of DB Application

Item	Description
Debit Collection Source	Accepts payments from a variety of initiation sources, such as: Electronic Banking Channels − They can be as follows: Retail and corporate customer facing systems of the bank. For example, internet banking portals STP feeder channels that aggregate collection request from corporate systems. For example, Enterprise Resource Planning (ERP) Mobile banking channels Branch − They are collection requests initiated by a bank’s branch or back-office user in response to an over-the-counter instruction. NOTE: Collection requests from Temenos Transact business applications are currently processed using the DD.DDI module.
Debit Collection Application	Receives (using standard Temenos Transact interface), validates, and routes the request to Temenos Payments.
Payment Processing System	Validates, books and routes collection requests to an appropriate clearing system. Payment system can only be Temenos Payments. Collection requests are exchanged with Temenos Payments in embedded mode. In-house collection requests are settled directly within the bank’s core banking instead of sending it to clearing.
Clearing Systems	Captures collection requests that can be cleared using different domestic clearings. NOTE: Domestic clearings can be an instant payment clearing system or Automated Clearing Houses (ACH) that processes bulk payments.

Collection Initiation Using Channels

DB can accept single PI requests from electronic channels by using one of the following methods:

Method	Description
Temenos Open Financial Service  (OFS)	Temenos online customer facing channels (such as internet banking) can use this method to send online payment requests to Payment Order (PO) application. This communication is used in interactive mode (synchronous), where a user is waiting at the terminal. DB instantly reports validation errors (if any) on the captured collection request and displays it to the user (interactively) for correction. It performs message exchange in embedded mode between the two Temenos products. Hence, not visible to an external operator. NOTE: Non-Temenos banking applications cannot use OFS method.
Application Programming Interface (API)	Third-party applications (non-Temenos systems) can use this method to initiate a payment. These are own or external systems that are connected to the bank network using a suitable gateway. This is hosted in Temenos interaction framework (IRIS) for third party applications to call, and the communication is synchronous from calling programs point-of-view. NOTE: IRIS can internally use OFS to communicate with DB. This interface is internal to Temenos Transact, and irrelevant to the calling application.

Manual Capture

DB supports capturing of PI requests for domestic clearings and instant payments. It provides the Collection Capture page for each type, which offers fields specific and appropriate to the collection or clearing. User can request DB to perform the following:

1. Validate (before submission) the captured collection information.
NOTE: If an error occurs, it can interactively inform the user to manually correct them before submitting for further approvals. This helps in reducing Supervisor’s rejections or STP failures in payment processing.
2. Submit all collection initiations for Supervisor’s approval.
3. After approval, it sends the payment to the payment system for determining the clearing (in the context of the installation) and distribution.

Custom pages for specific clearings based on bank’s requirements.

Collection Request Processing

The following are the stages to process a collection request:

Collection Enquiry

The user can search and view the collections as a generic enquiry, or view it by collection order status. The enquiry serves as a single dashboard for all collection types, sources and destinations, as DB aggregates payments from different channels.

DB enquiry allows the user to view collection order and payment system status. It also enables to customise the view based on the bank’s specific requirements (which the bank needs to maintain).

Multi-Bank or Branch Support

DB can work in a multi-bank or branch model that allows users to initiate orders on the following:

• Accounts that belong to same branch (where the user logs on)
• Accounts that belong to another branch, which is in the same Temenos Transact lead company (where the user logs on)

Illustrating Model Parameters

This section covers the below model parameters for the Debit Collection Initiation (DB) module.

S.No.	Parameters	Description
1.	DB.DEBIT.COLLECTION.ORDER	This application is used to obtain the Payment Related Information based on the Debit Collection product.
2.	DB.DEBIT.COLLECTION.PARAMETER	This application describes the features which connects Debit Collection Order and Payment System.
3.	DB.DEBIT.COLLECTION.PRODUCT	This application captures the features that are specific to a collection product.

Illustrating Model Products

This section covers the below model products for the Debit Collection Initiation (DB) module.

S.No.	Product Name	Product Attributes
1.	Direct Debit	Direct Debit is an instruction from payee to payee bank to collect the amount directly from payer bank account. Payee bank should be provided with the amount and dates of collection details in advance to honor the instruction.