A preauthorized debit is a form of preauthorized payment in which a business collects money directly from the payer's bank account under permission the payer gave in advance; the main entry covers how such payments are set up, controlled and cancelled. The term stresses the direction of the payment: the payee pulls the funds, rather than the payer pushing them.
Usage varies by country. In Canada, "pre-authorized debit" (PAD) is the formal name for this type of payment, and the rules set by Payments Canada govern the agreement, notice and reimbursement rights a payer receives. In the United States the same idea usually appears as an ACH debit, and the consumer protections for recurring transfers come from the rules on preauthorized electronic fund transfers. In the United Kingdom and Europe the everyday term is direct debit.
Whatever the name, a preauthorized debit rests on a mandate or agreement that identifies the payer's account and the payee, sets out the amount or how it will be calculated, and explains how the payer can stop future payments or dispute one taken in error.