Standing Order Vs. Direct Debit

Cập nhật thông tin chi tiết về Standing Order Vs. Direct Debit mới nhất ngày 26/11/2020 trên website Zdungk.com. Hy vọng nội dung bài viết sẽ đáp ứng được nhu cầu của bạn, chúng tôi sẽ thường xuyên cập nhật mới nội dung để bạn nhận được thông tin nhanh chóng và chính xác nhất. Cho đến thời điểm hiện tại, bài viết này đã đạt được 6,336 lượt xem.

Direct Debit and Standing Order are both automatic payment methods but have some important differences.

A standing order is an automated payment method set up between a customer and a bank to send payments to other people or organisations. A Direct Debit follows the same method, but it is authorised by a customer and managed by an organisation. A Direct Debit is set up by an organisation and they manage the frequency and amount. This is also the case for a standing order, but the difference is that the customer is in control of the frequency and amount.

What are Standing Orders and Direct Debit?

1. Direct Debit and Standing Order are both automatic payment methods

  • A standing order is an instruction your customer gives to their bank to pay you a fixed amount at regular intervals whether this is weekly, monthly, quarterly or yearly.

  • With Direct Debit, your customer authorises you to collect money directly from their bank account whenever a payment is due. Direct Debit payments can vary in frequency and amount.

2. You control a Direct Debit. Customers control a standing order.

  • A standing order is set up by customers. They choose the amount and frequency, and can change or cancel it without notifying you.

  • In contrast, you have full control over the payments you take by Direct Debit. You decide how much and how often you collect from customers. You can vary the amount and frequency of collections without further authorisation from the customer and are notified automatically by the Direct Debit system of any cancellations or failures.

Read the guide

Direct Debit vs Standing Order

Here’s a quick comparison of the two payment methods for you:

Cost per payment

Ostensibly free. You may incur a small charge from your bank for each payment.

Low. Depends on your provider. ( See our pricing)

Admin required

High.

  • Check bank statement daily to see what payments
  • No notification when a payment fails
  • Manually update your accounts

Very low.

  • Automatically submit 1000s of payments at once
  • Automatically update your accounts
  • Instant notifications when payments fail
  • Easily track payments without checking bank statements

Should I use standing order or Direct Debit?

Which is the right option for you depends on two key things:

1. Standing orders are great for very small organisations

If you have less than 25 customers, standing order may be a good option for you. Standing orders are great for smaller organisations or clubs with close relationships with their members.

However, if you have more than 25 customers Direct Debit is probably a better option for you. With a standing order, you will always need to check your bank account when a payment is due to find out whether a payment has actually been set up or if a payment has failed. On the other hand, with Direct Debit you set up the payments so you’ll know that everything’s in place. What’s more, you’ll be notified of any failures straight away so you’ll always know when you have and haven’t been paid without needing to trawl through your accounts.

2. Standing order is good if you are close to your customers

If you have less than 25 customers who you can trust to set up a standing order when asked and continue to make the payments this could be a great option for you as your customer does all the hard work for you.

However, if you aren’t sure whether you can trust your customers to set up or maintain a standing order then Direct Debit could be a better option for you.

3. Standing order is only suited to regular, fixed payments

Both standing order and Direct Debit could be used to make one-off payments – although neither of them are typically thought of as one off payment methods. Similarly to with regular payments, Direct Debit means you control the payment so you know that the payment has been set up and when you’ll receive it so there’s no chance of a customer forgetting to set up their standing order or setting it up on the wrong date.

If you think Direct Debit might be for you and would like to find out more about how GoCardless could help you to make your payments process cheaper and easier, our features page is a good place to start.

Read the case study

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