Direct debit

Last updated

A direct debit or direct withdrawal is a financial transaction in which one organisation withdraws funds from a payer's bank account. [1] Formally, the organisation that calls for the funds ("the payee") instructs their bank to collect (i.e., debit) an amount directly from another's ("the payer's") bank account designated by the payer and pay those funds into a bank account designated by the payee. Before the payer's banker will allow the transaction to take place, the payer must have advised the bank that they have authorized the payee to directly draw the funds. It is also called pre-authorized debit (PAD) or pre-authorized payment (PAP). After the authorities are set up, the direct debit transactions are usually processed electronically.

Contents

Direct debits are typically used for recurring payments, such as credit card and utility bills, where the payment amounts vary from one payment to another. However, when the authorization is in place, the circumstances in which the funds are drawn as well as the dates and amounts are a matter of agreement between the payee and payer, with which the bankers are not concerned. [2]

In countries where setting up authorization is easy enough, direct debits can also be used for irregular payments, such as for mail order transactions or at a point of sale. The payer can cancel the authorization for a direct debit at any time, and the banker can decline to carry out a debit if the transaction would breach the terms of the bank account out of which payment is to be made, for example if it were to cause the account to overdraw. (Banking law does not authorize a bank to alter the payment amount.)

A direct debit instruction differs from a direct deposit and standing order instruction, which are initiated by the payer. A standing order involves fixed payment amounts paid periodically, while a direct debit can be of any amount and can be casual or periodic. They also should not be confused with a continuous payment authority, where the payee collects money whenever it feels it is owed.

Direct debits are available in a number of countries, including the United Kingdom, Brazil, Germany, Italy, Netherlands, South Africa, Spain, Sweden and Switzerland. Direct debits are made under each country's rules, and are usually restricted to domestic transactions in those countries. An exception in this respect is the Single Euro Payments Area (SEPA) which allows for Euro-denominated cross-border (and domestic) direct debits since November 2010. In the United States, direct debits are processed through the Automated Clearing House network.

Origins

Alastair Hanton, a British banker and maths graduate, found that traditional banking methods of paying in cheques were incredibly costly. His answer was to gain permission from customers to take payment directly from their bank account. After six years of campaigning, the high-street banks finally agreed in 1964. By the end of the decade, the savings made using this method meant that direct debit had come into general use in the UK. [3]

Authorization

A direct debit instruction must in all cases be supported by some sort of authorization for the payee to collect funds from the payer's account. There are generally two methods to set up the authorization:

One method involves only the payer and the payee, with the payer authorizing the payee to collect amounts due on his or her account. However, the payer can instruct his or her bank to return any direct debit note without giving a reason. In that event, the payee has to pay all fees for the transaction and may eventually lose his or her ability to initiate direct debits if this occurs too often. However, it still requires all the account holders (not merely the payer) to watch statements and request returns if necessary, unless they have instructed their bank to block all direct debits.

The other method requires the payer to instruct his or her bank to honour direct debit notes from the payee. The payee is then notified that he or she is now authorised to initiate direct debit transfers from the payer. While this is more secure in theory, it can also mean for the payer that it is harder to return debit notes in the case of an error or dispute.

Fees

In all countries, fees for direct debits are much lower than for credit cards. Credit cards charge a percentage of the transaction (2.5% to 3%) and sometimes a per-transaction fee (about $0.25). In contrast, direct debit fees are $0.15 to $0.20 per transaction on the U.S.’s Automated Clearing House (ACH) network, and £0.20 to £0.40 per transaction on the U.K.’s New Payment System Operator (NPSO) network. [4] Fees vary between providers. Some offer flat rates while others have additional charges and monthly or yearly fees. [5]

Direct debit in different countries

Europe

In Europe, the SEPA Direct Debit (SDD) and SEPA Credit Transfer payment schemes are available in each SEPA country for payments within the Eurozone. [6]

SEPA Direct Debit initially worked alongside national direct debit schemes until 1 August 2014. From that date, only SEPA Direct Debit was permitted for collecting euro-denominated payments in the EU. In October 2016, SDD and IBAN became the mandatory methods for euro transfers in all of the EU and EEA, but not mandatory for transfers in other currencies.

United Kingdom

Direct Debit is a payment method for recurring payments in the UK. It is the third most popular payment method in the UK, after cash and debit card, according to Payments UK. [7] Bacs Payment Schemes Limited is the organisation with responsibility for the Direct Debit scheme. [8]

Direct Debit was invented by Alastair Hanton while he was working at Unilever as a way of collecting payments more efficiently. [9] It commenced operation, as a paper-based system, in 1964.

Direct Debit accounts for the payment of 73% of household bills and almost nine out of ten British adults have at least one Direct Debit commitment. [10] In 2015 nearly 3.9 billion Direct Debits were processed, [11] representing a year-on-year increase of 239 million which surpasses the previous record for annual growth of 161 million, set in 2004. [12] 4.07 billion Direct Debits were processed in 2016, an increase of 4.9% from 2015. [13] Payments UK predicted the figure is expected to rise to 4.4 billion by 2026. [14]

Authorisation

To set up payments by Direct Debit, the payer must complete a Direct Debit Instruction to the merchant. This instruction contains bank-approved wording that makes it clear the payer is setting up an ongoing authority for the merchant to debit their account. The interface for completing the Direct Debit Instruction is controlled by the merchant, who then sends the data from the form to the customer's bank, via Bacs.

The UK Direct Debit scheme rules allow for Direct Debit Instructions to be completed in several ways:

  • paper-based forms, which require a signature
  • over the telephone using a formal script to collect all the required information [15]
  • online, using an online application form which has been approved by a bank
  • through other interactive services, where the interface has been approved by a bank

Guarantee

All UK payments collected by Direct Debit are covered by the Direct Debit Guarantee, which is provided by the UK's banks and building societies. [16]

Under the guarantee a payer is entitled to a full and immediate refund in the event of an error in the payment of a Direct Debit from their account. [17] Where an error has occurred, refunds are paid immediately by the payer's bank, who will then attempt to recover the money from the merchant's bank, who in turn will attempt to recover the money charged back from the merchant.

Under the Direct Debit scheme rules, merchants have very few grounds to challenge a charge-back generated under the Direct Debit Guarantee. Instead, they can pursue any payments which they believe have been incorrectly refunded to the payer directly through the small claims court.

Access

Before a company or organisation can collect payment by Direct Debit they need to be approved by a bank, or use a commercial bureau to collect direct debit payments on their behalf. [18] This approval process ensures the company will be able to operate within the direct debit scheme rules and maintain the integrity of the scheme. [19]

If a large number of customers complain about direct debits set up by a particular service user then the service user may lose its ability to set up direct debits.[ citation needed ]

Dormancy

Any direct debit instruction that has not been used to collect funds for over 13 months is automatically cancelled by the customer's bank [20] (this is known as a "dormancy period"). This can cause problems when the mandate is used infrequently, for instance, taking a payment to settle the bill for a seldom-used credit card. If the credit card company has not collected a payment using the Direct Debit mandate for over 13 months the mandate may have been cancelled as dormant without the customer's knowledge, and the direct debit claim will fail.

Fraud

The problem of direct debit fraud is extensive according to research by Liverpool Victoria Insurance [21] which reveals that over 97,000 Britons have fallen victim to criminals setting up fraudulent direct debits from their accounts. An average of £540 goes missing before the customer notices. Direct debit payment fraud in 2010 accounted for around 10.6% of all identity fraud cases. The extent of direct debit scamming is set to grow to 41,000 cases a year by 2013, equating to a 57% rise.

However, the problem is exacerbated by some of the banks themselves for failing to implement any controls which prevent companies or fraudsters taking money from business and consumer accounts. [22] The problem of cancelled and obsolete direct debits being wrongfully revived or re-implemented is estimated to cost UK consumers £385 million in 2010. For those customers who find out, it takes them on average four months to notice. Although no specific figures were collected it appears a substantial number of people lose considerable amounts of money annually because the obsolete direct debit is neither noticed nor recovered. [23]

On 7 January 2008, Jeremy Clarkson found himself the subject of direct debit fraud after publishing his bank account and sort code details in his column in The Sun to make the point that public concern over the 2007 UK child benefit data scandal was unnecessary. He wrote, "All you'll be able to do with them is put money into my account. Not take it out. Honestly, I've never known such a palaver about nothing". Someone then used these details to set up a £500 direct debit to the charity Diabetes UK. In his next Sunday Times column, Clarkson wrote, "I was wrong and I have been punished for my mistake." [24]

Training

Businesses and organisations collecting payments through Direct Debit are instructed by Bacs to take mandatory training. Whether businesses are collecting independently or through a bureau, their relevant staff need to understand the fundamentals of the payment method. [25] Courses are available through Bacs or through accredited external training. There are only four recognised companies in the UK providing Bacs accredited training: Accountis (D+H), Bottomline Technologies, Clear Direct Debit and allpay. [26]

Canada

In Canada, direct debit payments are often referred to as Pre-Authorized Debits (PADs). PADs work over a computerized network through Payment Canada's federally-secured Automated Clearing Settlement System (ACSS). This network connects all of Canada's financial institutions. [27]

Germany

In Germany, banks generally have been providing direct debit (elektronisches Lastschriftverfahren (ELV), "Lastschrift", Bankeinzug) using both methods since the advent of so-called Giro accounts in the 1950s.

The Einzugsermächtigung ("direct debit authorisation") just requires the customer to authorize the payee to make the collection. This can happen in written form, orally, by e-mail or through a web interface set up by the payee. Although organisations are generally required not to instruct their banks to make unauthorised collections, this is usually not verified by the banks involved. Customers can instruct their bank to return the debit note within at least six weeks.

This method is very popular within Germany as it allows quick and easy payments, and it is suited even for one-time payments. A customer might just give the authorisation at the same time she or he orders goods or services from an organisation. Compared to payments by credit cards, which allow similar usage, bank fees for successful collections are much lower. Often retailers such as supermarkets will process Girocards as direct debit (ELV) transactions after performing a real-time risk analysis when the card is swiped. This is possible because the bank account number and routing code of the giro account form part of every Girocard's card number (PAN), similar to early 1990s 19 digit Switch card numbers. [28] The customer agrees to the direct debit by signing the back of the receipt, which normally contains a long contractual text that also allows the retailer to contact the customer's bank and get their address in the case the debit is returned ("Rücklastschrift"). Direct debits are practically free for the retailer, allowing them to save the Girocard interchange fees (approx. 0.3%) that would be associated with PIN based transactions, but incur a higher risk as the payment can be returned for any reason for up to 45 days. Therefore, they are used usually for returning customers that have already had successful Girocard (PIN-verified) transactions at the same store or are purchasing low-risk or small-ticket items.

To prevent abuse, account holders must watch their bank statements and ask their bank to return unauthorised (or wrong) debit notes. As fraudulent direct debit instructions are easily traced, abuse is rare. However, there can be issues when the amount billed and collected is incorrect or unexpectedly large. There have also been cases of fraudulent direct debit where the defrauders tried to collect very small individual sums from large numbers of accounts, in the hope that most account holders would be slow to raise an issue about such small sums, giving the defrauders enough time to withdraw the collected money and disappear.

The Abbuchungsauftrag ("posting off") requires the customer to instruct his or her bank to honour debit notes from the organisation. Direct debits made with this method are verified by the customer's bank and therefore can not be returned. As it is less convenient, it is rarely used, usually only in business-to-business relationships.

Netherlands

In the Netherlands, as in Germany, an account holder can authorize a company to collect direct debit payments, without notifying the bank. This process is very common, with as many as 45% of all banking transactions conducted via direct debit. [29]

A transaction can be ongoing, or one time only. For both types collecting organizations must enter into a direct debit (automatische incasso) contract with their bank. For each transaction the name and account number of the account holder must be provided. The collecting organisation can then collect from any account, provided there is enough money in the account and no block is set against direct debit from the collecting organisation.

Transactions can be contested, depending on the type of transaction, time since the transaction and the basis of dispute. Authorized transactions of the ongoing type can be recalled directly via the bank of the account holder within the 56 days (8 weeks) since the transaction, with the exception of transactions relating to games of chance and perishables. Authorized one-time only transactions can be recalled via the bank within 5 days. Unauthorized transactions can be contested via the bank within a limited time period after the transaction.

Another security measure is a "selective block" whereby the customer can instruct the bank to disallow direct debits to a specified account number. Blanket blocks are also available.

Poland

In Poland, direct debit is operated by KIR (Krajowa Izba Rozliczeniowa) and participating banks as one of the functionalities of the Elixir [30] clearing system. The payer has to authorize the payee by filling, signing and submitting a standardized paper form in two copies. One copy, after filling in payee details and a customer identification number, is sent by the payee to the payer's bank, which verifies the signature. From now on, the payee may debit the payer's account. Since 24 Oct 2012 it is also possible to submit such authorization through the payer's bank, often also online.

The payer can:

In case of cancelling a transaction, funds are immediately returned to the payer's account. Interest is also adjusted as if the transaction never happened.

Collecting fees through direct debit is supported mostly by companies such as telecom, insurance and utility companies and banks themselves but it is not widely used by consumers because of the bureaucracy involved in setting direct debits up.

Ireland

The direct debit system in Ireland was previously operated by the Irish Payment Services Organisation (IPSO) until its integration with the Irish Banking Federation (IBF) in 2014, forming the Banking and Payments Federation Ireland (BFPI).

Direct debit instructions can be given in writing, by telephone or online. There are protections for the holder of the account being debited in the event of a dispute. [31] The Irish payment system was replaced by the SEPA Direct Debit Core Scheme (SDD) following the conversion of all legacy credit transfer and direct debit systems to the Eurozone-wide SEPA system on 1 February 2014.

Denmark

Direct debit is preferred payment method for recurring household payments in Denmark. The service, launched back in the early seventies, is called "Betalingsservice" and is used by about 96% of the Danish households.

Japan

Direct debit is a very common payment option in Japan. When signing up for a service, such as telephone, a customer is usually asked to enter their bank details on the service submission form, to set up for automatic payments, and the company they are signing up to will take care of the rest. Sometimes, but not always, the customer is offered the possibility to enter credit card details instead of bank account details, to have the money directly debited from credit card instead of bank account. Direct debit is also an option for paying utility bills, alongside bank transfers and credit card payments. [32]

Malaysia

In Malaysia, the direct debit system is available via the product known as FPX – Financial Process Exchange. FPX supports online direct debit as well as batch direct debit.

Supported by Bank Negara Malaysia and the local financial institutions, FPX is operated by FPX Payment Gateway Sdn Bhd, a subsidiary company of Malaysian Electronic Payment System (1997) Sdn Bhd (MEPS).

Australia

In Australia, direct debit is performed through the direct entry system [33] also known as BECS (Bulk Electronic Clearing System) or CS2, managed by the Australian Payments Network Limited. An account holder can authorise a company to collect direct debit payments, without notifying the bank, but direct debit is not available on all financial accounts.

A common example of direct debit is authorising a credit card company to debit a bank account for the monthly balance.

Many smaller companies do not have direct debit facilities themselves, and a third-party payment service must be used to interface between the biller and the customer's bank. For this a small charge (typically $1–2 per transaction, incorporated into the bill amount) is made by the payment service.

Direct credit and debit instructions are only available to institutional customers. Direct credit instructions are used for payrolls and other large scale regular payments. Direct debit instructions are used by insurance companies, utilities and other large organisations which receive regular payments. Although governed by APCA rules, the actual exchanges of instructions occur through bilateral exchanges. There is no central "clearinghouse" for bulk direct entry payment instructions. [34]

United States

In the United States, direct debit usually means an Automated Clearing House (ACH) transfer from a bank account to a biller, initiated by the biller.

South Africa

In South Africa direct debits, also known as debit orders, are performed through the ACB (Automated Clearing Bureau). An account holder can authorise a company to collect direct debit payments. The client signs a debit mandate form giving the requesting company permission to debit their account with a fixed or variable monthly value. This value can be recurring or once-off. This is an effective, safe[ citation needed ] and more cost effective alternative to receiving money in cash, by cheque or EFT (Electronic Funds Transfer).

There are three types of commonly used debit orders in South Africa: EFT (Electronic Funds Transfer), NAEDO (Non-authenticated Early Debit Order) and AEDO (Authenticated Early Debit Order). [35]

A new payment stream introduced by the South African Reserve Bank in 2017, called AC or Authenticated Collections replaced the previous NAEDO payment stream with the purpose to reduce customer disputes and abuse of the debit order system. The AC payment stream is known to consumers as DebiCheck. [36]

Sweden

In Sweden, direct debit is available, called Autogiro. The amount is withdrawn from the payer's account on the payee's request without specification. The approval is done once without time limit for each payer/payee combination, but can be withdrawn at any time. The request is normally sent through a form from the payer to the payee, but in the internet bank it is also possible to request it. Autogiro should not be confused with the electronic billing system E-faktura although some banks let the payer instruct the bank to automatically pay received electronic bills on their due date without the customer having to log in to the internet bank and authorize the payment.

Switzerland

Switzerland has a form of direct debit called Lastschriftverfahren (LSV) der Banken.

The setup of a direct debit is by signed authority to the bank. Depending on the proposition of the bank, the direct debit is claimed and may or may not require authorisation. Some banks allow a limit to be put in place for automatic approval.

Turkey

In Turkey, direct debits are widely used, for utility and credit card payments, as well as commercial transactions. However, whereas in other countries the payee instructs his/her bank to make a collection, in Turkey the payer needs to authorise his/her bank directly. The usage differs from standing orders, as payment amounts are not fixed and payments need not be periodical (i.e. payments can be of any amount and can be casual or periodic).

Brazil

Authorized Direct Debit (DDA) is a system in Brazil created by Febraban (Brazilian Federation of Banks) and associated Brazilian banks that replaces the issuance of printed payment slips with the electronic collection of obligations. It was implemented on October 10, 2009.

See also

Related Research Articles

<span class="mw-page-title-main">Debit card</span> Card used for financial transactions, usually without a credit line

A debit card, also known as a check card or bank card, is a payment card that can be used in place of cash to make purchases. The card usually consists of the bank's name, a card number, the cardholder's name, and an expiration date, on either the front or the back. Many of the new cards now have a chip on them, which allows people to use their card by touch (contactless), or by inserting the card and keying in a PIN as with swiping the magnetic stripe. These are similar to a credit card, but unlike a credit card, the money for the purchase must be in the cardholder's bank account at the time of the purchase and is immediately transferred directly from that account to the merchant's account to pay for the purchase.

<span class="mw-page-title-main">ACH Network</span> United States automated clearing house

In the United States, the ACH Network is the national automated clearing house (ACH) for electronic funds transfers established in the 1960s and 1970s. It processes financial transactions for consumers, businesses, and federal, state, and local governments. ACH processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit for payroll, Social Security and other benefit payments, tax refunds, and vendor payments. ACH direct debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills.

<span class="mw-page-title-main">Transaction account</span> Bank holding that clients can access on demand

A transaction account, also called a checking account, chequing account, current account, demand deposit account, or share draft account at credit unions, is a deposit account or bank account held at a bank or other financial institution. It is available to the account owner "on demand" and is available for frequent and immediate access by the account owner or to others as the account owner may direct. Access may be in a variety of ways, such as cash withdrawals, use of debit cards, cheques and electronic transfer. In economic terms, the funds held in a transaction account are regarded as liquid funds. In accounting terms, they are considered as cash.

<span class="mw-page-title-main">Wire transfer</span> Electronic funds transfer

Wire transfer, bank transfer, or credit transfer, is a method of electronic funds transfer from one person or entity to another. A wire transfer can be made from one bank account to another bank account, or through a transfer of cash at a cash office.

<span class="mw-page-title-main">Giro (banking)</span> Payment transfer from one bank account to another bank account and initiated by the payer

A giro transfer, often shortened to giro, is a payment transfer from one current bank account to another bank account and initiated by the payer, not the payee. The debit card has a similar model. Giros are primarily used in Europe; although electronic payment systems exist in the United States, it is not possible to perform third-party transfers with them. In the European Union, the Single Euro Payments Area (SEPA) allows electronic giro or debit card payments in euros to be executed to any euro bank account in the area.

<span class="mw-page-title-main">Cheque</span> Method of payment

A cheque or check is a document that orders a bank, building society to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The person writing the cheque, known as the drawer, has a transaction banking account where the money is held. The drawer writes various details including the monetary amount, date, and a payee on the cheque, and signs it, ordering their bank, known as the drawee, to pay the amount of money stated to the payee.

<span class="mw-page-title-main">Bacs</span> Bank transfer system in the United Kingdom

Bacs Payment Schemes Limited (Bacs), previously known as Bankers' Automated Clearing System, is responsible for the clearing and settlement of UK automated direct debit and Bacs Direct Credit and the provision of third-party services. Bacs became a subsidiary of Pay.UK on 1 May 2018, and responsibility for direct debit, Bacs Direct Credit, the Current Account Switch Service, Cash ISA Transfer Service and the Industry Sort Code Directory was given to Pay.UK.

A chargeback is a return of money to a payer of a transaction, especially a credit card transaction. Most commonly the payer is a consumer. The chargeback reverses a money transfer from the consumer's bank account, line of credit, or credit card. The chargeback is ordered by the bank that issued the consumer's payment card. In the distribution industry, a chargeback occurs when the supplier sells a product at a higher price to the distributor than the price they have set with the end user. The distributor submits a chargeback to the supplier so they can recover the money lost in the transaction.

<span class="mw-page-title-main">Overdraft</span> Payments from a bank account exceeding the balance

An overdraft occurs when something is withdrawn in excess of what is in a current account. For financial systems, this can be funds in a bank account. In these situations the account is said to be "overdrawn". In the economic system, if there is a prior agreement with the account provider for an overdraft, and the amount overdrawn is within the authorized overdraft limit, then interest is normally charged at the agreed rate. If the negative balance exceeds the agreed terms, then additional fees may be charged and higher interest rates may apply.

A merchant account is a type of bank account that allows businesses to accept payments in multiple ways, typically debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of payment card transactions. In some cases a payment processor, independent sales organization (ISO), or member service provider (MSP) is also a party to the merchant agreement. Whether a merchant enters into a merchant agreement directly with an acquiring bank or through an aggregator, the agreement contractually binds the merchant to obey the operating regulations established by the card associations. A high-risk merchant account is a business account or merchant account that allows the business to accept online payments though they are considered to be of high-risk nature by the banks and credit card processors. The industries that possess this account are adult industry, travel, Forex trading business, multilevel marketing business. "High-Risk" is the term that is used by the acquiring banks to signify industries or merchants that are involved with the higher financial risk.

Chargeback fraud, also known as friendly fraud, cyber shoplifting, or liar-buyer fraud, occurs when a consumer makes an online shopping purchase with their own credit card, and then requests a chargeback from the issuing bank after receiving the purchased goods or services. Once approved, the chargeback cancels the financial transaction, and the consumer receives a refund of the money they spent. Dependent on the payment method used, the merchant can be accountable when a chargeback occurs.

A payment is the tender of something of value, such as money or its equivalent, by one party to another in exchange for goods or services provided by them, or to fulfill a legal obligation or philanthropy desire. The party making the payment is commonly called the payer, while the payee is the party receiving the payment. Whilst payments are often made voluntarily, some payments are compulsory, such as payment of a fine.

<span class="mw-page-title-main">Payment card</span> Card issued by a financial institution that can be used to make a payment

Payment cards are part of a payment system issued by financial institutions, such as a bank, to a customer that enables its owner to access the funds in the customer's designated bank accounts, or through a credit account and make payments by electronic transfer with a payment terminal and access automated teller machines (ATMs). Such cards are known by a variety of names, including bank cards, ATM cards, client cards, key cards or cash cards.

<span class="mw-page-title-main">Single Euro Payments Area</span> System for money transfers within the European Union area

The Single Euro Payments Area (SEPA) is a payment integration initiative of the European Union for simplification of bank transfers denominated in Euros. As of 2020, there were 36 members in SEPA, consisting of the 27 member states of the European Union, the four member states of the European Free Trade Association, and the United Kingdom. Some microstates participate in the technical schemes: Andorra, Monaco, San Marino, and Vatican City.

A floor limit is the amount of money above which debit card or credit card transactions must be authorized online by their Issuing banks. The limit can vary from store to store. Floor limits have become less significant as credit cards & most of the debit cards started being processed electronically, and all transactions are typically authorized online by sending the Authorization request to their issuing banks.

A standing order is an instruction a bank account holder gives to their bank to pay a set amount at regular intervals to another's account. The instruction is sometimes known as a banker's order.

Authorization hold is a service offered by credit and debit card providers whereby the provider puts a hold of the amount approved by the cardholder, reducing the balance of available funds until the merchant clears the transaction, after the transaction is completed or aborted, or because the hold expires.

<span class="mw-page-title-main">Credit card fraud</span> Financial crime

Credit card fraud is an inclusive term for fraud committed using a payment card, such as a credit card or debit card. The purpose may be to obtain goods or services or to make payment to another account, which is controlled by a criminal. The Payment Card Industry Data Security Standard is the data security standard created to help financial institutions process card payments securely and reduce card fraud.

<span class="mw-page-title-main">Credit card</span> Card for financial transactions from a line of credit

A credit card is a payment card, usually issued by a bank, allowing its users to purchase goods or services or withdraw cash on credit. Using the card thus accrues debt that has to be repaid later. Credit cards are one of the most widely used forms of payment across the world.

<span class="mw-page-title-main">Automated clearing house</span> Type of electronic network for financial transactions

An automated clearing house (ACH) is a computer-based electronic network for processing transactions, usually domestic low value payments, between participating financial institutions. It may support both credit transfers and direct debits. The ACH system is designed to process batches of payments containing numerous transactions, and it charges fees low enough to encourage its use for low value payments.

References

  1. ↑ "What is Direct Debit?". www.directdebit.co.uk. Retrieved 2023-01-21.
  2. ↑ "Direct Debit System & Recurring Payments | Noorbank". www.noorbank.com. Retrieved 2018-01-23.
  3. ↑ "Alastair Hanton Obituary" . The Times. June 17, 2021.
  4. ↑ "How direct debit benefits businesses and payers" . Retrieved 2022-12-07.
  5. ↑ "FAQ Friday – How much does it cost to process Direct Debit payments?" . Retrieved 2022-12-07.
  6. ↑ EU Regulation 260/2012
  7. ↑ "Debit Cards Set To Overtake Cash in 2018, Three Years Earlier Than Expected". Payments UK. 2017-05-25. Archived from the original on 2017-06-29. Retrieved 2017-06-14.
  8. ↑ "About". Bacs. Retrieved 2017-06-14.
  9. ↑ "How Direct Debits began in the UK". YouTube . Retrieved 8 September 2016.
  10. ↑ "Automated payments at all-time high as Bacs breaks six billion barrier". Business Money. 20 January 2016.
  11. ↑ "Bacs corporate overview". Bacs. Archived from the original on 2016-03-03. Retrieved 2016-03-02.
  12. ↑ "Automated payments at all-time high as Bacs breaks six billion barrier". business-money.com. 20 January 2016. Retrieved 2016-03-02.
  13. ↑ "Bacs achievements 2016" (PDF). Bacs. 2016.
  14. ↑ "Number of Direct Debit transactions expected to grow by 2026". SmartDebit. 2017-05-30. Retrieved 2017-06-14.
  15. ↑ "BACS: Paperless Direct Debit". Bacs. Archived from the original on 21 December 2012. Retrieved 29 May 2012.
  16. ↑ "The Direct Debit Guarantee". Bacs. Archived from the original on 26 May 2012. Retrieved 29 May 2012.
  17. ↑ "Direct Debit vs recurring card payments". SmartDebit. 2017-06-26. Retrieved 2017-07-05.
  18. ↑ "What is a Direct Debit?". AccessPay. 27 September 2016.
  19. ↑ "What's involved in taking payments by Direct Debit?". Eazy Collect. Retrieved 29 May 2012.
  20. ↑ "What happens when a Direct Debit is inactive?". Inactive Direct Debits. BACS.
  21. ↑ Montia, Gill (November 19, 2010). "Sharp increase in direct debit fraud". Banking Times. Archived from the original on August 22, 2016.
  22. ↑ "North Wales News". www.dailypost.co.uk. Retrieved 2019-04-09.
  23. ↑ "UK Banks Responsible For Direct Debit Scams – Don't Use Direct Debit Or You Could Lose Your Money". Clifford Miller Law. 2012-01-26. Retrieved 2019-04-09.
  24. ↑ "Clarkson stung after bank prank". BBC News . 7 January 2008.
  25. ↑ "Training". Bacs. Retrieved 2017-06-14.
  26. ↑ "Accredited training". Bacs. Retrieved 2017-06-14.
  27. ↑ "Automated Clearing Settlement System (ACSS) Rules and Standards". Payments Canada. 2016-08-02. Retrieved 2019-06-26.
  28. ↑ Yang, Maximilian (September 1, 2016). "Card Payments and Consumer Protection in Germany" (PDF). Anglo-German Law Journal.[ permanent dead link ] p. 13-14.
  29. ↑ "MKB-Nederland". Archived from the original on 2007-09-13. Retrieved 2008-09-22.
  30. ↑ "KIR: the Elixir system" . Retrieved 2016-06-27.
  31. ↑ Guide to the Irish direct debit system
  32. ↑ Ltd, Plaza Homes. "How to Pay Utility Bills in Japan". PLAZA HOMES. Retrieved 2023-07-31.
  33. ↑ "Home | Australian Payments Network" (PDF). apca.com.au. Retrieved 2019-04-09.
  34. ↑ Alan L Tyree. "The Australian Payments System". Archived from the original on 2012-04-07. Retrieved 2012-04-08.
  35. ↑ Direct Debit. "Debit Order Services in South Africa" . Retrieved 2012-06-07.
  36. ↑ Direct Debit. "Authenticated Collection Payment Stream" . Retrieved 2015-09-30.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.