Difference Between Direct Debit and Standing Order (With Table)

Direct Debit is a payment technique in which the customer has permission from the account holder at a bank to withdraw a specific amount due from the account holder’s bank account. Whereas, In the event of a standing order, a person with a bank account gives instructions to pay a specified amount of money to another person’s bank account at regular intervals.

Direct Debit vs Standing Order

The difference between Direct debit and standing order is that, In the case of Direct Debit, the payee frequently regains control of the payments. In the case of the Standing Order system, the payer’s power overpayments are usually restored and kept. In most cases, the amount charged for transactions in a Standing Order remains constant. However, The amount charged in Direct Debit transactions can change from one transaction to the next.

The administration fees imposed in the event of Direct Debit are significantly lower than those payable in the case of Standing Order. The frequency of payments specified here in the case of Direct Debit is not specific. It is, however, alterable. The nature of the processes involved in the direct debit process is complicated. Direct Debit is a time-efficient technique. Therefore it runs more quickly. In the case of a Direct Debit, the payee can be notified automatically if the transaction fails or is cancelled.

The administration fees charged in the case of a Standing order are significantly higher than those payable in the case of a Direct Debit. When it comes to the frequency of Standing Order payments, it cannot be altered; rather, it is precise and to the point. The nature of the operations involved in the standing order process is quite basic. Standing orders take longer to complete than Direct Debit. As a result, the operation of this process is likewise up to grade, if a little slow.

Comparison Table Between Direct Debit and Standing Order

Parameters of ComparisonDirect DebitStanding Order
Nature ComplexSimple
Control on Payment Payee Payer
Administration feeComparatively LowComparatively high
SpeedFast Slow
Notifications Notifications come Notifications do not come

What is Direct Debit?

Direct Debit is a payment technique in which the customer obtains permission from the account holder at a bank to withdraw a specific amount due from the account holder’s bank account. Control over payments is usually restored with the payee in the case of the Direct Debit system.

The amount charged in the case of Direct Debit transactions may differ from one transaction to the next. The administration fees imposed in the event of Direct Debit are significantly lower than those charged in the case of a Standing Order. The frequency of payments given here for the Direct Debit technique is not particular. It is, however, changeable.

The nature of the operations involved in a direct debit transaction is complicated. Direct Debit is a time-saving process. As a result, it is more efficient to use. In the case of a Direct Debit, the payee can receive automatic notifications if the transaction fails or is cancelled.

What is Standing Order?

In the event of a standing order, an individual with a bank account gives instructions to pay a certain amount of money to another individual or person’s bank account at regular intervals. In the case of the Standing Order system, the payer’s control over the payments is usually restored and kept. In the case of a Standing Order, the sum charged for transactions is usually fixed.

The amount does not change from transaction to transaction. The administration fees imposed in the case of a Standing Order are significantly higher than those payable in the case of a Direct Debit. When it comes to the frequency of Standing Order payments, it cannot be changed; rather, it is precise.

The nature of the steps involved in the standing order process is quite straightforward. The time it takes to process a standing order is slower than it is to conduct a Direct Debit. As a result, the operation of this process is also up to par but slow. In the case of a standing order, the payee does not get any such alerts regarding transaction failure or cancellation.

Main Differences Between Direct Debit and Standing Order

  1. The process of Direct Debit refers to a payment system in which the customer possesses the authorisation from the account holder in a bank to withdraw a certain amount that was due from the holder’s bank account. On the other hand, in the case of Standing order, some instructions are provided by the individual possessing a bank account to pay a specific amount of money to another individual or person’s bank account in periodic intervals.
  2. In the case of the system of Direct Debit, the control over the payments is usually restored with the payee. On the other hand, in the case of the system of the Standing Order, the control over the payments is usually restored and retained with the payer only.
  3. The amount that is charged in case of transactions in case of Direct Debit may vary from one transaction to another. On the other hand, the amount that is charged in case of transactions in case of Standing Order generally remains fixed. The amount doesn’t vary from one transaction to another.
  4. The administration fees that are being charged in the case of Direct Debit is comparatively much lower than that of the Standing Order. On the other hand, the administration fees that are being charged in case of a Standing order is comparatively much higher than that of the Direct Debit.
  5. In the case of the procedure of Direct Debit, the frequency of payments mentioned here is not specific. Rather it can be changed. On the other hand, When the frequency of payments of Standing Order is taken into account, it can not change. Rather it’s to the point and specific.
  6. The nature of the processes involved in the process of direct debit is complex. On the other hand, the nature of the processes involved in the process of the standing order is very simple.
  7. The process of Direct Debit is time effective. Hence the operation of this process is faster. On the other hand, In the process of the standing order, the time consumed is comparatively slower than Direct Debit. Hence, the Operation of this process is also up to the mark but comparatively slow.
  8. The payee can receive automatic notifications regarding the failure or cancellation of the transactions in case of the Direct Debit. On the other hand, the payee does not receive any such notifications regarding the failure or cancellation of transactions in case of the standing order.

Conclusion

Direct Debit is a payment system in which a customer obtains permission from a bank account holder to withdraw a specific amount owed from the account holder’s bank account. Control over payments is frequently returned to the payee in the case of the Direct Debit system. The amount paid for Direct Debit transactions varies from transaction to transaction.

Whereas, in the event of a standing order, a person with a bank account gives instructions to pay a specified amount of money to another person’s bank account regularly. Control over payments is normally restored and held with the payer only in the case of the Standing Order system. In the case of a Standing Order, the amount charged in the event of a transaction is usually fixed. From one transaction to the next, the sum is the same.

Direct Debit has substantially lower administration fees than a Standing Order. The frequency of payments specified here is not particular in the case of the Direct Debit technique. It is, however, modifiable. The processes that go into a direct debit transaction are complicated. Direct Debit is a time-saving process. As a result, it operates more quickly. In the case of a Direct Debit, the payee can receive automatic warnings about transaction failure or cancellation.

Standing order administration expenses are substantially greater than Direct Debit administration fees. When it comes to the frequency of Standing Order payments, it cannot be altered; instead, it is precise. The methods involved in the standing order process are quite straightforward.

When compared to Direct Debit, the standing order process takes longer. As a result, the process’s operation is also satisfactory, albeit slow. In the case of a standing order, the payee does not get any such warnings about transaction failure or cancellation.

References

  1. https://www.tandfonline.com/doi/abs/10.1080/135048594357871
  2. https://ieeexplore.ieee.org/iel5/4911125/4926388/04926399.pdf
x
2D vs 3D