| In recent years direct debits have increased in | | | | Unless both the originator and recipient use the same |
| popularity and in many instances replaced the more | | | | bank, standing orders generally take 3 days to |
| established and long-serving standing order. There are | | | | transfer funds from one account to the other. |
| a number of reasons why this shift in payment | | | | Although this may be of little consequence to the |
| method has occurred and direct debits have become | | | | originator of the payment: as the funds leave their |
| the standard means of facilitating regular transactions | | | | account on the date stipulated, the recipient is in a |
| between individuals and organisations: | | | | much stronger position in terms of cash flow if the |
| Flexibility of Amount | | | | money enters their account immediately as opposed |
| Whilst standing orders are set up in order to allow | | | | to floating about in the bank's system. As a result of |
| the transfer of a pre-established sum, direct debits | | | | this benefit to the recipient, there are often |
| are considerably more flexible. Although initial direct | | | | incentives to consumers to opt for direct debit which |
| debit contracts stipulate an agreement figure to be | | | | mean that they ultimately pay less for a service, |
| transferred, this is not set in stone and the recipient | | | | without being put out in any way. |
| can change the figure to be taken in accordance with | | | | Security |
| amount owed. This feature of direct debits is | | | | Standing orders are a secure method of payment, as |
| particularly useful for telecoms and utility companies | | | | the bank must be consulted to make any |
| due to variations in usage on the part of the | | | | amendments to the payment structure. Due to the |
| originator. | | | | malleability of the sums involved in direct debit, and |
| Flexibility of Interval | | | | the power the recipient has over them, guarantees |
| Much like the rigidity of sum in standing orders, dates | | | | have been implemented to ensure security for the |
| are also set for funds to be transferred. This is not | | | | payment originator. The Direct Debit Guarantee is a |
| the case with direct debits meaning that payment | | | | safeguard measure implemented and operated by |
| dates can be tailored as appropriate. An even more | | | | the bank facilitating the direct debit and states that |
| advantageous aspect of this feature over the format | | | | the bank is accountable for reimbursing any |
| of standing orders is the ease with which payment | | | | incorrectly or erroneously taken direct debit, providing |
| dates and figures can be adjusted according to | | | | a safety net for those who use the system. |
| circumstances: with a standing order, permissions | | | | The benefits of direct debit far outweigh those of |
| must be obtained for any change in payment date or | | | | standing orders, as such it is easy to see why this |
| sum and the standing order cancelled and a new one | | | | relatively new means of funds transfer is rapidly |
| implemented. | | | | replacing standing orders in almost all instances. |
| Speed of Funds Transfer | | | | |