Direct debit is a payment method that authorises a company to regularly debit money from a customer’s account. This process is automated according to a preset frequency and amount. This makes it easy for both the customer and the company to manage financial transactions without manual intervention.
What must a debt collection comply with?
A direct debit must meet several criteria, including:
- Valid authorisation: The direct debit must be based on a valid authorisation from the account holder. In doing so, it must explicitly authorise the debiting of funds.
- Notification: The company collecting must notify the account holder of the collection, including the exact amount, frequency and collection date.
- Cancellation and amendments: Account holders should have the right to cancel or amend the authorisation at any time. The company must respect these changes.
- Laws and regulations: the direct debit must comply with all relevant laws and regulations, such as the European SEPA (Single Euro Payments Area) rules and local financial legislation regarding data protection and financial transactions.
Direct debit authorisation TriFact365
TriFact365 works with a direct debit. Around the first of the month, the invoice is prepared and sent for the previous month’s costs. Then, around the fifteenth of the month, TriFact365 debits the invoiced costs based on the direct debit authorisation. It is possible to manage the company details of the direct debit in TriFact365.