Term - E : Electronic Clearing Service (ECS)

Electronic Clearing Service (ECS)

Electronic Clearing Service (ECS) Credit/Debit

This is an inter-bank arrangement. A customer can give instructions to his bank to debit his account and make periodic payments to an account in another bank. This arrangement is superior to drafts or individual funds transfers when a large number of periodic payments have to be made. ECS Credit can be used by one organisation to make payments to many beneficiaries at the same time as when a company has to pay dividends or staff salaries. ECS Debit is used when many users have to make payments to one organisation as when people have to pay their telephone or electricity bills