Direct debits
Businesses use direct debits to collect funds from their customers’ accounts for the value of, for example, insurance premiums, utility bills and repayment of debt. The customer will give a Direct Debit Request (DDR) authority for a business (known as the Debit User) to draw funds out of the customer’s account with a financial institution. The DDR will typically cover regular, recurring payments. Once the DDR is established, the Debit User initiates payment under the authority through its own financial institution. Currently, there are more than 16,000 Debit Users in Australia.

Direct credits
Direct credits are widely used by businesses and consumers alike as a convenient way to make a payment to anyone who has a financial institution account. Employers commonly pay their employees by direct credit and government departments use it for regular payments such as Centrelink allowances. Other common examples are dividend and interest payments. In recent years, direct credit is also being used to provide widespread access to internet-based (sometimes called “Pay Anyone”) and phone-based banking services. Businesses initiating direct credits (either for themselves or on behalf of customers) are known as Credit Users. There are more than 223,000 Credit Users in Australia. To receive direct credit payments, account holders simply need to give their account details to the Credit User.

Direct credits and direct debits are covered by APCA’s direct entry system, the Bulk Electronic Clearing System (BECS). Direct entry is a convenient, safe and reliable way to make and receive payments. The strength of the system is its cost-effectiveness and the convenience it provides businesses and consumers.