Introduction to Direct Debits

Most people have heard of the term ‘Direct Debit’ but it is important to know an exact definition and how a Direct Debit might differ from other forms of payment such as Standing Orders, faster payments and Direct Credit.

Definition of a Direct Debit

A Direct Debit can be defined as an instruction from a customer to their bank or building society authorising an organisation to collect varying amounts from their account, as long as the customer has been given advance notice of the collection amounts and dates.

This definition contains a number of important pieces of information which are key to Direct Debit:


  1. Collection is by the Service User.

    The process of collecting the money is initiated and managed by the organisation who wishes to receive payment. It is not a process managed by the person paying the bill.

  2. Varying financial amounts and dates

    The Direct Debit can cover varying financial amounts and dates unlike a Standing Order which covers a specified amount.

  3. Bank and Building Society

    Not all Banks and Building Society accounts support the collection of Direct Debits.

  4. Approval

    The owner of the Bank / Building Society account must have given approval to the Service User to collect the payment by authorising a Direct Debit Instruction

  5. Direct Debit Guarantee

    The process is covered by the Direct Debit Guarantee which is offered by the Banks / Building Societies to the owners of the Bank / Building Society account.

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About Bacs & Pay.UK

On 1st May 2018 Bacs Payments Schemes Ltd – known as “Bacs” – became a wholly owned subsidiary of Pay.UK.

Learn more about both organisations by clicking below.


Bacs & Pay.UK - More Information

Important Direct Debit Terms

The following are terms that you will see used throughout this training site and are common within the area of Direct Debits. Understanding these terms will help you better understand the Scheme itself.


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