Direct debit

(Known in English as "Direct Debit").

The direct debit procedure enables companies to debit recurring payments from their customers' bank accounts in order to settle invoices or subscriptions automatically.

Direct debit

Direct debit is a payment method that allows companies to withdraw money from their customers' bank accounts in order to collect recurring payments. This procedure is particularly suitable for subscriptions or regular bills such as rent or insurance premiums. Customers issue an authorization to allow the company to collect the money. Direct debit offers convenience and automation, as payments are made automatically without the customer having to transfer money manually.

Direct debit examples

An online streaming service uses direct debit to debit monthly subscription fees from its customers' accounts.

A gym automatically collects membership fees by direct debit from its members' bank accounts.

An e-commerce company allows customers to order products via a subscription and uses direct debit to receive regular payments.

Direct debit FAQ

  • Yes, customers have the right to cancel a direct debit within eight weeks without giving reasons. This revocation option allows consumers to reverse a direct debit transaction if they do not agree with it or if there are problems.

  • The direct debit procedure is secure, as companies are only allowed to collect payments with the customer's prior authorization. This authorization can be given in the form of written consent or electronically. This ensures that companies cannot debit money from the customer's account without their consent.

  • To set up a direct debit procedure, customers must give the company a direct debit authorization. This can be done by filling out a form, which is often provided by companies. Nowadays, this consent can also be confirmed online, making the process even more convenient for customers.

  • Direct debit offers the convenience of automating regular payments. Customers do not have to actively take care of paying invoices as payments are automatically debited from their account. This helps to ensure timely payments and can reduce the administrative burden.

  • If the account balance is insufficient to debit a direct debit, the transaction will fail. This may result in charges from the bank, depending on the terms of the account. It is important to ensure that there are sufficient funds in the account to avoid unwanted charges and to ensure the proper processing of direct debit payments.