How does direct debit work within a system?

Direct debit is an electronic payment method that allows individuals or organizations to authorize the collection of funds directly from their bank accounts. Within a system, direct debit operates as a seamless and automated process. Firstly, the payer grants permission to the payee to initiate collections by providing their bank details. On the agreed-upon payment dates, the payee electronically submits a request for funds to the payer's bank. The bank then debits the specified amount from the payer's account and transfers it to the payee's account. This system ensures timely and efficient payments, minimizing the need for manual interventions and providing convenience for both parties involved.

This mind map was published on 10 January 2024 and has been viewed 60 times.