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.

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.
References in periodicals archive ?
Founded in 1988, AutoScribe is the leader in the pre-authorized payment and checks-by-phone industry.
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.
SwitchAgent is the first automated service of its kind, developed to make it easier for consumers to transfer pre-authorized payments and deposits, such as gym memberships, car loans, mortgages, utility bills, and Social Security and payroll deposits, from their old bank account to their new Texas Trust account.