A system for effecting payments electronically, especially for recurring transactions, streamlines the transfer of funds between different bank accounts. For instance, a utility company might use this system to automatically debit customer accounts for monthly bills, eliminating the need for manual check processing.
This automated system offers numerous advantages, including reduced administrative costs, increased efficiency, and faster processing times. Historically, it emerged as a response to the growing volume of paper-based transactions and the need for a more scalable and secure payment infrastructure.
