Preauthorized payment

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Also found in: Acronyms.

Preauthorized payment

Accelerating cash inflows by directly charging a customer's bank account with permission.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Preauthorized Payment

Any agreement between a bank and an account holder whereby the account holder gives the bank permission to automatically debit the account by a certain amount every month. The amount may go to the bank to pay a standing fee, but most often goes to a third party. For example, a customer may set up a pre-authorized payment plan to pay his internet bill each month. See also: Direct Debit, Standing Order.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
But responding effectively to changing times, say some specialists in church giving, is less about trying to keep up with technology for its own sake, and more about remembering a few key things--including the importance of enabling and encouraging pre-authorized payments.
Ten million times a day, Canadians withdraw cash from banking machines and use cheques, debit cards and pre-authorized payments to make payments that result in one deposit-taking financial institution owing money to another.