In Brazil there is a unique banking modality that enables the display of all bills through electronic means. In this article, we will learn more about Débito Direto Autorizado.
Débito Direto Autorizado, which is Portuguese for Approved Direct Debit, or DDA, is an online banking system created by Febraban - Brazilian Federation of Banks - in conjunction with several associations of Brazilian banks, with the support of Bacen, the Central Bank of Brazil.
DDA was designed in order to make it easier to pay bills in Brazil, by making payment available through electronic means - internet, phone, ATM and others.
There are three types of bills that are sent to individuals and entities in Brazil:
- Boleto de Cobrança, which is a type of payment slip, used for collecting most fees or payments in Brazil, such as school fees, online purchases, condominium fees and other services or goods acquired by a consumer
- Tax collections
- Utility bills
Of these, DDA is able to present through electronic means only the Boleto de Cobrança as of March 2015, without estimate for inclusion of the other types of bills. It is also important to state that DDA is only able to present electronic boletos sent to banks in the form of Cobrança Registrada, which is Portuguese for Registered Collection. Those sent to banks in the form of Non-registered Collection cannot be made available through DDA.
Difference between DDA and Direct Debit
It is important to distinguish DDA from Débito Automático, which is Portuguese for Direct Debit. Both can be confounded one for the other, but the difference between them is that DDA is just a service of electronic presentation of bills due which does not necessarily imply their payment, while Direct Debit is a service of payment for utility bills with their payment being previously authorized.
DDA presents many benefits:
- Reduction in the use of paper - Boletos amount to more than 2 billion paper slips per year in Brazil, but this number was reduced by 40% thanks to DDA
- Certainty that the bills will reach the user of DDA, since physical boletos are subject to loss, damage and fraud
- Minimizing waiting lines in banks
In March 2012, Febraban introduced a new functionality to DDA: the display of overdue boletos. When paid after the set deadline, the system will automatically adjust the value of the boleto, adding any fines or interest rates that might apply to it when it is overdue. This innovation means a lot to a country where overdue boletos have to be paid in cash and at the bank that issued the boleto.
Many banks also offer the possibility of authorizing - or not - the payment of boletos, displayed electronically through DDA, thanks to a SMS system. The SMS system will warn the user on the day the boleto is sent to them and again on the day the boleto is due.
Integration with all banks
All banks registered with Febraban are integrated in the DDA. So, if a drawee has a bank account in one bank and receives a boleto from another bank, they may pay it directly in their own bank.
How does DDA work
In order to use DDA, it is necessary to have a bank account in Brazil. Information on how to open a bank account can be found in this article.
Then, it is necessary to register with your bank as “sacado eletrônico”, which is Portuguese for Electronic Drawee. Banks usually offer four different ways of registering for DDA:
- Via the Internet Banking System
- Via the Telephone Banking System
- At ATMs
- Physically, by filling out a paper form and handing it in at a bank
Bacen, the Central Bank of Brazil, does not specify any rules for fees over the use of DDA system. Thus, if there are any fees, it is the responsibility of the bank to inform them clearly to the consumer.