The line between standing orders and Direct Debit is often blurred.
Both payment instructions to a bank or building society, one (standing order) is permissible by the individual making the payment, and the other (Direct Debit) by the service provider.
In the past, standing orders have been favoured by many beneficiaries because it decreases their involvement in the setup process. However:
- Payment days and amounts are fixed, revised only by the individual making the payment
- Payment failures are more difficult to spot
- And time is quickly eaten up on administration.
A positive trend
A 2016 Bacs report found that Direct Debit usage grew by almost 5% in this year. It also emerged that 9/10 UK adults currently have at least one Direct Debit.
Arguably one of the biggest reasons for this continued popularity surge is the flexibility that comes with Direct Debits. Billing days and amounts are variable in line with the ebb and flow of a clientele’s business requirements. Payments are automatic, and changes can often be made without necessitating authorisation from a client.
Unlike a standing order, there is no reliance on a customer to ensure the payment process is setup. Direct Debits also allow companies to track and monitor payments far more easily, keeping tabs on exactly how much is coming and going at any time.
Beyond this, Direct Debits are protected under the Direct Debit Guarantee. Customers will receive an instant refund in the instance of an incorrect payment and companies will be notified when a payment has failed.
Taking a step forward
Debit Finance partner Think Fitness, an independent gym facility, experienced 80% growth in just three years after making the move away from a standing order payment model.
Using our online joining portal, FastDD, Think Fitness were able to automate the Direct Debit payment process saving them hours in paperwork and encouraging a greater customer base thanks to the ease of use. We were able to take the onus off them by managing their cash flow so that they could focus their attention elsewhere.
With our help, you can make big changes too. It’s our mission is to help you improve your relationships with your customers so that they stay longer. You can leave us to collect your Direct Debits, while you concentrate on running – and growing – your business