A recurring debit is a payment that a business collects from a customer's account repeatedly, at agreed intervals, under a single authorisation given in advance. Mortgage instalments, utility bills, insurance premiums, subscriptions and loan repayments are typical examples. Because the payee pulls the money, the payer does not have to act each time, which reduces late payments for the business and missed bills for the customer.
Recurring debits run on several rails. In the United Kingdom and Europe they are usually a direct debit, including the SEPA Direct Debit scheme, set up under a mandate. In the United States they are generally ACH debits. Charges to a stored card are the card equivalent, known as a recurring card transaction. Payers can usually cancel future debits and, within scheme time limits, claim refunds for debits taken in error or without authorisation.