If you are considering automated payment methods, you will come across standing order and direct debit. There are some differences between the two and you can compare them in order to decide what is more suitable for you. A standing order is an automated payment method that’s set up between a bank and its customer for sending payments to other organizations. The same method is followed in a direct debit, but it is managed by the organization and authorized by the customer. This means that the organization is responsible for fixing the frequency and amount of a Direct Debit.
The same applies to a standing order, with the difference being that the customer will decide the amount and frequency. The primary difference between standing order and direct debit is that the latter is in control of the business or organization receiving the payment whereas the former is under the control of the customer making the payment. When the customer opts for standing order, they will be able to choose the amount and frequency and will have the freedom of cancelling it without notifying you.
In contrast, if Direct Debit is chosen as a payment method, it will give the business or recipient complete control of the payments. They will be able to decide how much and how often they can collect payments from their customers. The frequency and amount of the payments can be varied without consulting the customer and getting authorization every time. If there are any cancellations or failures associated with the Direct Debit system, the recipient is immediately notified and can take action.
In the case of a standing order, payments are typically made at regular intervals like weekly, biweekly, monthly or annually and are fixed. But, for Direct Debit, the amount can vary and even the frequency can be different.
