Muscat – These developments aim to streamline payment processes, reduce reliance on cheques, and foster a more efficient and secure banking environment in the Sultanate.
The CBO has implemented several improvements to the Direct Debit Service, which is defined as a payment order to debit the payer for the benefit of the beneficiary, as per Article 22 of the National Payment System Law.
These improvements aim to:
• Facilitate and enhance the use of the Direct Debit Service among individuals and businesses.
• Support digital transformation within the financial sector and reduce the reliance on cheques.
As part of the initiative, the CBO, in collaboration with commercial banks, has launched a pilot project for the Direct Debit System and the Direct Debit Mandate Management System. These systems will enhance the efficiency of recurring payment collections, such as monthly instalments and subscription fees.
In addition to operational upgrades, the CBO has worked closely with relevant authorities to reinforce the legal framework for the service. Under Chapter Six of the National Payment Systems Law, beneficiaries are now provided with legal and penal protection in cases where a direct debit instrument is dishonoured, similar to the protections available for bounced cheques.
This legal and operational framework for the service is expected to:

• Reduce the use of cheques for recurring payments, such as monthly installments.
• Decrease the risks of forgery and fraud associated with cheques.
• Expedite the payment collection process.
  To further enhance digital transformation, the CBO has launched the Electronic Mandate for Direct Debit service through electronic banking channels. This service allows bank customers in the Sultanate of Oman to approve direct debit mandate electronically via electronic banking services, benefiting individuals, businesses, and the financial sector.
  Several local banks have already rolled out the new service, with others expected to complete the Implementation of this service by 2025
  The service offers several advantages compared to the current paper-based system, including:
  • Reducing operational costs compared to cheques
  • Increasing the speed of fund transfers between different parties
  • Increasing efficiency through process automation
  • Providing the opportunity to create new financial services
  • Reducing the risk of errors
  • Improving transaction security
  • Reducing transaction processing time