Direct debit becoming the most popular method for organizing regular payments
Direct Debit is one of the most popular ways for collecting single or recurring payments from Clients. The latest statistics of BACS for 2017 reveal that in the UK 9 out of every 10 people with a bank account have at least one Direct Debit with the total volume of direct debit transactions in the UK for that same year adding up to £4.2 billion.
What is a Direct Debit?
Direct Debit is an automated payment method where the Client authorizes your company to take payments from their bank account on a one-off or on a regular basis. The contract of a direct debit is between you and the Client with the signing of a mandate (electronic or paper-based). The payments are collected as fixed or varying amounts charged to the Client’s bank account at a predetermined frequency.
What is the difference between Direct Debits and Standing Orders?
The standing order is another largely popular way for processing regular, fixed payments, as well as one-off payments between organizations and Clients. Both Direct Debits and Standing orders are reliable, secure and easy to set up, but they operate differently:
– With the Standing order, your Client instructs their bank to pay you a fixed sum at regular intervals, thus controlling the amount and the frequency at which the transactions are made. With the Direct Debit you initiate the transaction and can alter the amount and the frequency of the payments.
– The standing order is suitable for fixed amounts, while the Direct Debit is used both for fixed and fluctuating sums.
– With the Direct Debit, in case of an unsuccessful transaction, your bank notifies you of the failed payment.
Both Direct Debits and Standing orders provide a flexible and convenient solution for organizations to streamline their cashflows. With its latest product enhancements Satabank was among the first to offer to its Clients SEPA Direct Debit which allows direct debit transactions in euro in all SEPA countries.