What is direct debit?

A direct debit is a guarantee required by banks for a company's activities. It is designed in part to reassure these establishments that the company will pay fees relating to its banking operations. It is also one of the compulsory steps involved in opening a company account with a bank. When setting up a new business, the capital of the new company must be paid into the bank account opened for this purpose.

To set up a new business, you'll need to provide a deed of assignment of lease rights, proof of address and valid identification. The company's status, SIREN number and notice of publication in a legal gazette are also required. When it comes to choosing a direct debit institution, it's important to bear in mind ..:

  • banking services,
  • tariffs,
  • relations with the bank,
  • loan options and related rates,
  • authorized overdrafts,
  • the availability of financial advisors,...

Companies are also advised to have their accounts domiciled with a bank specialized in their sector of activity. But direct debit is not just for businesses. Individuals can also do so, by opening an account with a financial institution to receive their salary and other income.

Once the account has been opened, the banks issue the customer (whether a company or an individual) with a bank identification number (RIB), which he or she makes available to anyone who may make transfers to his or her account.

This statement includes the name and address of the account holder, the bank code and the branch code.

On the RIB, you'll also find the account number and the RIB key followed by the IBAN and BIC codes, which identify your account internationally. In addition, you'll find the account's direct debit, which indicates the name of the bank and the city in which it is located.

How does direct debit work?

The principle of direct debit is to allow, with your authorization, your expenses to be automatically paid without your intervention. The initiative for payment rests with the organization withdrawing the money from your account. A direct debit can be used for repeated payments or for a single payment. It can be used both nationally and within the SEPA zone.

Organizations such as CPAM and CAF, which regularly deduct or pay large or small amounts into your account, need this information. The financial institution also deducts its management fees directly from the account.

The Pacte law gives banking structures the right to propose a plurality of offers, to encourage companies to domicile their business accounts with them. This may involve, for example, an offer of a free bank card or a reduction in management fees.

How do I change my direct debit?

Changing your direct debit is free and easy. It takes just twelve working days. All you need to do is open another current account with a new bank and obtain a new RIB, which you'll pass on to your business partners and the relevant authorities. With the Macron law of 2017, banking establishments can now take charge of changing their customers' direct debit.

This law, designed to make banking mobility simpler and more accessible, saves you the laborious process of closing accounts. You can sign a mandate with your new bank to transfer your account and transactions free of charge.

The new bank can also send your new RIB to your creditors and debtors. If you wish, you can also bypass bank switching by keeping both your accounts. However, you must only use one main account for your social security payments.

Direct debit and digitalization: a winning combination

With the rise of digital technologies, direct debit has also evolved to adapt to new digital practices. Today, many banks offer fully online direct debit solutions, simplifying administrative procedures for businesses and individuals alike. Online banking platforms enable fast account opening, with the option of directly downloading the necessary documents.

This digitalization promotes smoother, more transparent account management, thanks to mobile applications and intuitive user interfaces. What's more, digital banks often offer competitive rates and innovative services such as integration with online accounting tools, making direct banking more accessible and efficient than ever.

Direct debit and loans: what do you need to know?

To grant you a home loan, the bank may require a direct debit. This enables the bank to directly manage the borrower's current account, where his or her income is paid. Although the bank does not have the right to impose this requirement, it can offer you several advantages in return for direct debit.

You may benefit from an extension of the loan repayment period, a lower interest rate or a reduction in processing fees. Registering your income with the lending institution is generally a good way of negotiating the terms and conditions of the loan.

The strategic importance of direct debit for corporate financial management

Bank domiciliation is more than just an administrative formality; it is of strategic importance to a company's financial management. By centralizing financial flows, it enables optimized monitoring of transactions and greater visibility for financial institutions, thus facilitating cash management. In addition, it reinforces the company's credibility with its commercial and financial partners, by providing a stable point of reference for all banking operations. This stability is a significant asset for the confidence and fluidity of business relations.