What is the main characteristic of a direct debit?

A direct debit is a financial arrangement that allows an organization to withdraw funds directly from a customer's bank account to settle bills or payments on agreed-upon dates. The main characteristic of direct debits is that the instruction to collect the funds comes from the entity that is entitled to receive the payment, not from the account holder itself. This means that once the direct debit is set up, the recipient has the authority to request varying amounts within the parameters established, making it convenient for ongoing payments like subscriptions or utility bills.

This option reflects the nature of how direct debits function, which is significantly different from other payment methods where the payer has to manually initiate each transaction. Other options do not align with the definition of a direct debit, as they mistakenly describe different forms of payment agreements or processes. For instance, one-time transactions are more characteristic of one-off payments like bank transfers, and the discretion in payment amounts does not lie with the bank but rather with the agreement made by the account holder with the receiving party.