Customer direct debits
When a vendor has an agreement with a customer to collect payments automatically, the vendor sends a payment request message to the vendor's bank. The vendor's bank is prompted to collect the customer payment by requesting money from the customer's bank. Typically, the communication between the vendor and the bank is electronic.
A remittance advice, manual or electronic, is sent by a vendor to the customer to indicate which invoices are being paid. Typically, they include invoice numbers and invoice amounts.
India specifics
The ECS debit scheme is the only direct debit scheme in India. This includes payments to electricity, telephone, insurance, credit card companies, or payments of loan installments. ECS debit aggregates a large number of debits into a single credit to the beneficiary. The system works on the principle of preauthorized debits, which is a signed paper mandate that is obtained from the customers by the utility company. A copy of the signed mandate is maintained at the bank.