At its core, bank debit is a pull-based payment mechanism that puts you in control of collecting payments from your customers, rather than relying on them to send you funds when payment is due. You specify the collection amount, charge date, and frequency of payment and, providing you are authorised to collect payment from the customer’s bank account, the funds will be processed as per your instructions.
What is ‘bank debit’?
Bank debit is the universal term we use to refer to the bank-to-bank payment method through which payments are processed within the GoCardless network.
Common regional terms include Direct Debit; Pre-Authorised Debit (or Pre-Auth); or in some cases by the name of their operator, such as ACH in the US.
Each country (or in some cases, region) operates its own bank debit scheme with its own rules and regulations. These rules and regulations govern things like advance payment notice requirements, payment request submission processes, failure notice periods, and more.
What is a bank debit ‘scheme’?
A bank debit scheme is the infrastructure and/or operational mechanism - and by association, the body who owns, administers, and maintains that mechanism - that enables bank-to-bank payments to be processed within a particular country or region.
The scheme a payment is processed through is determined by where the payer (or more specifically, their bank account) is based. Click here for more information.