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Direct Debit

Overview

A Direct Debit is a formal instruction from an individual or business to a bank or building society. This instruction authorises a specific organisation to be able to deduct funds automatically from a bank account, provided that the necessary notice of the amount and date of collection has been given to the account holder.

Example

Direct Debits are most commonly used when regular payments are required to/from an organisation, and the amount paid is not a fixed amount each time. For example, an electricity bill, or credit card bill may be paid on the same date every month, but the exact amount may change.

If the amount to be paid was constant, this could be done by Direct Debit or a standing order. For example, a fixed length gym membership.

APQC Framework

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