What is Direct Debit

What is Direct Debit ?

Direct Debit is a payment process for collecting monies from your clients without having to wait for them to physically tranfer the payment to your business. A lot of business owners and people in general often get confused at to what is direct debit, so hopefully this site explains what is direct debit a little more clearly.

Direct debit payments are used by people everyday to pay for goods and services, you probably already have direct debit payments set up for various services you subscribe to such as phone bills, water bills, gym memberships etc. Direct debit payments are very common these days amongst the big companies and larger organisations. In fact some companies such as Foxtel only accept direct debit payments for their service, they do not allow you to pay any other way.

To better explain what is direct debit you need to know the difference between a direct transfer from your bank account or credit card to another bank account and a direct debit from one account to another. A direct transfer is not a direct debit as some people often think. A direct debit payment  is automatic and is initiated by the account receiving the money not the account transfering the money. A good example to help you understand what is direct debit is to use the example of a gym membership payment. 

When you sign up to a gym you will often be asked for your credit card or bank account details to have the gym membership fees paid from. Once you sign the direct debit authority you are basically telling the business that they can automatically take the money out of your account and place into theirs on the date and frequency nominated on the direct debit form. Once this is done you do not have control over that payment leaving your account and into theirs, it happens automatically.

We hope the information provided helps you better understand what is direct debit!

For more information about direct debit companies or to find a direct debit company to assist you collect payments for your business visit either www.directdebitcompanies.com.au  or www.directdebitcompany.com.au