How does direct debit work?

Direct debit is a convenient and popular payment method that allows individuals or organizations to pay bills or make regular payments automatically. It works by authorizing a creditor, such as a utility company or subscription service, to withdraw funds directly from a customer's bank account on a specified date. To set up a direct debit, the customer provides their bank account details and signs a mandate, authorizing the creditor to collect payments. The creditor then submits the mandate to their bank, which processes the payments and transfers the funds from the customer's account to the creditor's account. This automatic payment method offers convenience, as it eliminates the need for manual payments and ensures timely bill payments without the risk of forgetting or missing due dates.

This mind map was published on 10 January 2024 and has been viewed 42 times.