Banking essentials – The difference between direct debit and standing order

Banking essentials - The difference between direct debit and standing order

Apart from lending money to people, the banks do offer more service which we are mostly unaware of. One such thing is the direct debits and standing order. Many a time people confuse them both for each other. To provide clarity, we have presented you with a piece of in-depth information about the difference between direct debit and standing order. These methods are offered to the people in terms of making their monetary transaction a bit easier.

Direct debits are a method which grants complete access to the payee. Through this process, the payee is given the total authority to claim and receive the amount that has to be paid from the payer from the account of that people. The standing order is another method where there is no direct involvement of the payee. Instead of the direct involvement, here the banks act as a middle person, where the proper instruction or command is given to the payer to regularly send the amount of due that is kept unpaid to the payee’s account.

The major difference among them is that when involving the direct debits there can be different amounts due every month. The amount need not be the same for every month. But in the case of a standing order that criteria are not possible. There cannot be a difference in the amount of payment each month. Every month’s transferable amount must be maintained in the constant range. When it comes to direct debit, the control over the payments is granted to the payee. Meanwhile when in consideration of standing order, the control over the payment is given to the payer. The administration fee charged is very high for standing order when compared to the direct debits. The direct debits can be a bit complex process but standing order can be processed easily.

Leave a Reply

Your email address will not be published. Required fields are marked *