When regular payments have to be made, it is a lot more convenient for people to opt for automatic payment methods. This can save you a lot of time and hassle because you don’t have to worry about remembering to make the payment every time. This is where Direct Debit and standing order come in as both of these are automated payment methods and you can choose one for your payment needs. But, how do you make a choice? In order to do so, you first need to understand the difference between Direct Debit and standing order.
If you understand the difference, you will be able to choose a method that’s appropriate for your situation. The primary difference between a direct debit and a standing order is that the former can only be setup by the organization that will receive the payment. When you choose direct debit as your payment method, you basically give permission to the receiving party to take a variable amount from your bank every month. This kind of automatic payment is mostly used by people for their gas or phone bills; as the amount is flexible, payments can often vary. The advantage of this option is that you will only have to pay for what you use.
On the other hand, standing orders are automatic payments that you will set up on your own. This means you have complete control over how much to pay and when to pay it and it can be amended when you want. You basically instruct your bank to pay a fixed amount at regular intervals. These intervals can be specified like monthly, weekly, quarterly, annually and so on. It can be used to pay rent, subscriptions for any services that you are using or for transferring fixed payments to someone.