Thursday, December 5, 2013

The mess called ECS

It was designed to be the simplest and easiest way to pay your bills on time. Free of charge. Easily set up online. If you are worried about your bills overshooting your bank balance, you can even specify a cut-off limit above which bills will not be paid. 

It is of huge benefit to billers, as they are assured of timely payments and do not have to go to the additional expense of follow ups, disputes with customers, cheque pick up services etc. 

Then why is it so chaotic, bureaucratic and hard to set up, change or cancel?

In the last few months, as our business goes through a transition of switching banks, I have had to change my ECS set up a couple of times. I imagined it would be an easy procedure as nowadays most banks actively urge you to do it online. I was so wrong.

Here are some of the things that I found out about ECS:

When there is a mess up you have to run between the bank and the biller, as both will pass the buck. Ultimately, it's better to sort the issue with the biller as they are the ones with a stake in the issue - you are their customer and your bill payment is at stake. 

You cannot simply transfer an ECS from one bank acccount to another. I thought a fresh instruction over-rides the previous one, but I was wrong. You need to cancel the existing ECS to register a fresh one.

The call centres of most service providers will tell you that you need to visit the service centre to sort out the issue. Insist on speaking to a supervisor.  It is possible to cancel an ECS over the phone or email. Just make sure that you speak to someone who knows the correct procedure.

Online registration through the bank is still your best bet. It takes less time for registration to be approved and there is no loophole for error. 

If you choose the manual method to register an ECS (and you may have to do it if the biller is not registered online with the bank), then do not forget to complete the loop by submitting a copy of the final form with the bank. Otherwise, there is a great chance of the bank not receiving it and rejecting the ECS. Each time the biller presents the bill and it gets rejected, you will be charged a rejection fee. This has happened to me a couple of times!

I think a lot of the confusion is down to the fact that the method is hybrid - half online, half online. And some banks operate on branch banking (still) while billers have mostly graduated to a centralised system (MTNL is an exception among my billers)

In many cases, the ECS process is smooth, requires virtually no set up time and you do not need to give it a second thought. But when things go wrong, it can still be extremely messy and frustrating to sort out!