Which type of ACH payment is typically used by businesses to collect payments?

Direct debits are commonly used by businesses to collect payments because they allow the business to withdraw funds directly from a customer's bank account with their authorization. This method is particularly efficient for recurring payments like subscriptions, utility bills, or loan repayments, as the customer does not need to initiate the payment each time.

In the context of ACH (Automated Clearing House) payments, direct debits streamline the collection process for businesses by providing a reliable and automated way to ensure timely payment without requiring frequent manual input from customers. This can lead to improved cash flow management for businesses, as they are assured of receiving the funds on schedule.

In contrast, while standing orders enable customers to set up automatic payments, they are typically initiated by the customer rather than the business. Direct credits involve transferring funds into an account rather than collecting payments, and wire transfers are generally used for large, one-off payments rather than regular collection of dues.