Direct Debit

Direct debit is a payment arrangement that allows an authorized payee to initiate collections from the payer’s bank account under an agreed mandate.

Collections may be fixed or variable within the mandate’s terms. Unlike a standing order, the collection is initiated by the payee. The mandate authorizes the payment process; the invoice or underlying agreement explains the nature of the amount, and bank confirmation establishes whether collection occurred.

Used for recurring collections such as utility bills, subscriptions and agreed instalments, with reconciliation to invoices and bank transactions.

A customer authorizes a utility provider to collect monthly bills. One month’s collection is AED 600 and the next is AED 750, subject to the mandate and billing arrangements.

Automates recurring collections while making mandate control, invoice matching and monitoring of failed or unexpected debits necessary.