Direct debits for business.

What are direct debits?

Direct debits are a convenient way to collect regular payments from your customers.

Once you’re approved to accept direct debits, your customer can give you authority to take the amount owed from their bank account at regular intervals – which means they don’t need to remember to pay you, and you get paid the right amount on time.

Because you control the amount, date and reference data of each payment, it’s an easy way to manage a high volume of incoming payments and reconcile them.

If you’re a business or service provider that meets the requirements for becoming a direct debit initiator, we’ll work with you to determine if you’re a standard initiator, preferred initiator or paperless initiator. The main difference between these is the way you gain consent from your customers to debit their accounts.

Find out about standard initiators, preferred initiators and paperless initiators.

Types of direct debit initiators.

Standard initiator

Standard initiators are generally small or medium-sized businesses that receive a high volume of regular payments. As a standard initiator, your customer will need to provide you with a signed direct debit authority form that you deliver to their bank in person, by post or email. Once your customer’s bank has loaded the authority to their bank account, you can start collecting payments by direct debit.

If you deliver the form by email, you’ll need to securely store the original authority form for at least 120 days after the first transaction is sent under that authority and be able to provide it to your customer’s bank if requested. You may wish to retain the authority form, or a copy of it, for a longer period in line with your standard retention policy.

Standard initiator guide

Preferred initiator

Preferred initiators are generally well-known organisations or service providers such as insurance companies, financial institutions, local authorities, public sector entities and utilities.

As a preferred initiator, you don’t need to send a signed direct debit authority form to your customer’s bank and wait for the authority to be loaded to their bank account. The authority is electronically loaded when you request your first payment.

You’ll need to securely store the original signed authority form (or an accurate record of it) for at least seven years after the last transaction is sent under that authority and be able to provide it to your customer’s bank if requested.

Preferred initiator guide

Paperless initiator

Paperless initiators generally meet the requirements of a preferred initiator but also have additional approval to set up direct debit payments online or over the phone. As a paperless direct debit initiator, you obtain authority from your customers in writing or verbally, but you don’t need your customer to provide you with a signed direct debit authority form. Your authorisation code is electronically loaded to their bank account when you collect your first payment.

You’ll need to securely store an accurate record of the details of the direct debit authority, and the authority details provided to your customer, for at least seven years after the last transaction is sent under that authority. You must be able to provide this information to your customer’s bank if requested.

Paperless initiator guide

Standard initiator.

Preferred initiator.

Paperless initiator.

Things you should know.

Westpac’s General Terms and Conditions and terms for the direct debit initiator service apply. Fees and charges, eligibility and credit criteria apply. See the Business Transaction and Service Fees Brochure for details.

This guide is provided by Westpac to support our customers with the direct debit initiator service, but it does not cover all obligations that may apply to your business. Westpac does not warrant the accuracy, adequacy or completeness of this guide for your business.