What is a Direct Debit? How UK businesses collect regular payments
By SendPay Business · · 2 min read
A Direct Debit is an instruction a customer gives their bank to let a business collect money from their account. The business decides the amount and date, within what it has told the customer, which makes it popular for bills that vary, such as utilities.
How it works
- The customer signs a Direct Debit mandate with the business.
- The business tells the customer in advance how much it will take and when.
- On the date, the business collects the payment through the Bacs system.
- The customer can cancel the mandate with their bank at any time.
Direct Debit vs standing order
With a standing order, the customer sets a fixed amount and date and the bank sends it; the business can't change it. With a Direct Debit, the business pulls the payment and can change the amount, as long as it gives notice.
Direct Debit vs card subscriptions
Card subscriptions charge a saved card on a schedule and can start straight away. Direct Debits usually take a few days to set up and collect, but tend to cost less per payment and don't fail when a card expires.
The Direct Debit Guarantee
If a payment is taken in error, the customer is entitled to an immediate refund from their bank. That protection is one reason customers are comfortable with Direct Debits.
Where SendPay fits
SendPay platforms include subscriptions, so your customers can be charged on a repeating schedule under your brand, powered by licensed partners. A Creator & Membership Platform starts at £3,200.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.