Four Ways To Use Direct Debit For Payment

If you’re looking to set up a regular payment, you may need to do that using the direct debit option.

According to <>, a direct debit authorises someone to collect payments from your account when they are due. You give this authorisation by completing a direct debit mandate form – this can be a paper form or a web page that you complete online. Once authorised, the organisation can automatically take payments from you (provided that they comply with the scheme rules).

  • Regular bills– With direct debit, you know all your important bills will be paid on time each month.
  • Fixed subscriptions or memberships – Direct debit is the safest and easiest way to make recurring payments like magazine subscriptions or gym memberships.
  • Paying on account– Some organisations will provide direct debit as an option for spreading costs or paying on account.
  • One-off payments: While direct debit is usually associated with regular and recurring payments, it can also be used for one-off payments. Direct debit should not be used for one-off payments where instant transfer of funds is needed like e-commerce. However, if the organisation you are paying does not need the money immediately, direct debit can be a great option.

Important direct debit scheme rules you should know:

Advance notice –You must be told the amount and date of each payment in advance.

Direct debit guarantee – You are entitled to an immediate refund for any payments that shouldn’t have been taken.

Direct debit is safe, convenient and cost effective for customers.

There are three benefits of making payments using direct debit:

Convenience – Payments are automatic, so bills are never forgotten, lost or delayed.

Cost – Businesses may offer incentives for paying by direct debit.

Customer protection – Direct debit is a safe payment method.

A report by gives some steps for managing direct debit. You should be notified in advance of any changes or amounts to be paid or the payment dates.

Always check your bank statement. Direct debits are usually shown with a DD alongside the payment. Make sure the amount and date paid tally with the advance notice if you are offered a choice of payment dates. When setting up a direct debit instruction, choose a date that best suits your cash flow – just after your salary is paid, for example. This way, you can be sure there is enough money in your account and you won’t go overdrawn.

The direct debit guarantee ensures that in the unlikely event of an error being made in the payment of your direct debit, you will receive a full refund from you bank.

You don’t even have to worry about transferring your direct debit payments if you choose to switch bank accounts.

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