A direct debit is an arrangement under which a third party is authorised to instruct a bank to transfer a cash sum out of a bank account, or pay money into it. The bank will execute the transaction on the date agreed between the client and the third party. The direct debit amount can vary.
When salary payments are made by direct debit, employers are instructed to transfer the employee’s salary to their bank account. Direct debits can also be used to authorise automatic payment of water or electricity bills.