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What is a Direct Debit?

A simple explanation of how Direct Debits work and why they're one of the most popular payment methods in the UK.

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Written by David Edward
Updated over 2 weeks ago

A Direct Debit is an instruction from a customer to their bank, authorising a business to collect payments from their account.

Unlike a standing order (where the customer sets up the payment themselves), a Direct Debit is managed by the business collecting the payment. This means you control when and how much is collected, within the terms agreed with your customer.

Your customer signs a mandate once. From that point, you can collect any amount on any agreed date without them having to lift a finger. They're notified before every payment and can cancel at any time.

Direct Debits are used across the UK for everything from utility bills and subscriptions to invoices and rent. They're one of the most common and trusted ways to collect payments, with over 4.5 billion processed every year.

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