A system and method for authorizing a direct debit transaction is provided. A remotely accessible server receives a request from a clearing entity to conduct a direct debit transaction against a financial account of a consumer on behalf of a merchant, and checks whether the consumer has previously approved a debit against the account on behalf of the merchant. If the consumer has previously approved a debit on behalf of the merchant, an authorization message is generated and transmitted to the clearing entity. If the consumer has not previously approved a debit on behalf of the merchant, an electronic prompt is generated to an electronic device of the consumer requesting the consumer to approve or deny the debit. In response to the consumer indicating approval, a debit authorization message is generated and transmitted to the clearing entity, and a database is updated to indicate approval by the consumer.