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?
Direct Debit and Standing Order are both automatic payment methods
- A standing order is an instruction you give to your bank to pay you a fixed amount at regular intervals whether this is weekly, monthly, quarterly or yearly.
- With Direct Debit, you authorise us to collect money directly from your bank account whenever a payment is due. Direct Debit payments can vary in frequency and amount.
Standing Orders are good for very small businesses
Small businesses with a small number of customers are able to easily look through their bank statement and check who has paid their standing order. Customers could cancel their standing order without warning, so payments by standing order depend highly on trust.
Direct Debit works well for larger organisations
Here at Chester-le-Street ASC, we’ve built our own systems to handle and track payments by direct debit of monthly fees. This significantly reduces our overheads and reduces the burden on our volunteers.