A system of payment for goods which is used in certain types of trade, particularly where, although the supply is to be constant, the precise amount in volume or price can vary within marginal limits from one period to another. The purchaser arranges for the vendor to be paid by a direct bank transfer, the amount of which is notified to the bank by the vendor at the time of delivery. It is not dissimilar to a standing order but differs in so far as the periodic charge might vary from week to week, or month to month, within agreed limits.
Reference: The Penguin Business Dictionary, 3rd edt.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >