Direct debit

Automatic (European) direct debit or SDD. An account-to-account payment (A2A payment) whereby the collector instructs his bank to debit an amount from the payer’s payments account and credit it to his own payments account. Only a company or institution can collect payments automatically, and only after it has concluded a collection agreement with its bank and after the payer has provided the collector with a direct debit authorization. Energy companies, among others, use direct debits to have their customers pay for their energy costs every month.