The Direct Debit Process varies from country to country. Here is a simplified version of one of the ways through which a direct debit transaction can take place. This process comprises of the following key participants
- Customer's Bank
- Merchant's Bank
- Direct Debit Service Provider
- Payment Switch
The customer initiates the process by signing-up for direct debits on the merchant's website. The direct debit service provider's API which is integrated with the merchant's back office system collects this information and passes this on to the provider's payment gateway. The information is processed, converted into the language readable by the payment switch, which then passes it onto the concerned customer's bank and the merchant's bank. The respective banks process this information and the results are passed to all the concerned parties.