subject: Direct Debit Versus Standing Order: Are They Different? [print this page] Today, millions of people prefer to pay their personal and household bills by arranging for it to be automatically collected from their account. The two most popular payment methods preferred by many people are the standing order and the Direct Debit. However, a lot of people are unaware what the difference is between standing order and Direct Debit services. People want to know which payment method will best help them save more money in the long run.
Direct Debit And Standing Order Explained:
A lot of people have been confused between standing orders and direct debits for a long time, and it is completely understandable. Both payment methods use instructions to your bank to ensure that periodic payments are made to the third party. The difference between this two payment methods are rather small but it is highly significant.
Standing order is an instruction to your bank to make period payments for a fixed amount of money to another business or individual. The amount cannot change unless you decide to cancel the existing standing order and set up a completely new one. It also takes a few days before the money arrives in the collectors bank account.
The Direct Debit, on the other hand, is an authorisation that allows a business or another individual to collect money from your bank account to pay for your periodic personal or household bills. The collector will then collect varying amounts of money during collection period. Typically, the amount is fixed and the collection is regular. However, there are times when these amounts may change, but you have to be informed by the collector about it.
The main and the most crucial difference between Direct Debit and standing order is that, in Direct Debit, the collector can make changes with regards to amount and collection date without the need to obtain the customers signature. The flexibility is also an advantage for the Direct Debit payment method. However, some consumers are skeptical about this payment method due to the potential risk involved. Fortunately, the Direct Debit payment system has certain safeguards. One of the safeguards for consumers is the Direct Debit guarantee. The guarantee ensures that the consumers bank will refund unclear payments.
One of the best Direct Debit providers is SmartDebit, and you can learn more about them if you visit their site. Before using any of the two payment methods, it is vital to first understand how each of the system works, and determine which system you can benefit from the most.
