23 Jun 2022

What’s the difference between a Direct Debit and a standing order?

Direct Debit vs Standing Order

Although a direct debit and a standing order are used to collect money and deliver it to a person, company, or service, there are still significant differences.

For example, it is more common to see a direct debit system when discussing a business. Larger companies like using direct debit payments because, ultimately, the company has to set it up and also has control over the payments.

So, why use a standing order? A standing order refers to a payment where you personally create the payment and send it monthly or fortnightly to a person, service, or company. It is more casual and gives power to the person who is paying for the service, and has created a standing order between the two.

When looking into the differences and which one is best for you and your needs, you will need to make a list of pros and cons for each as well as detailing what you would use the services for.

If you need a direct debit, it is likely that the payment amount changes frequently, and there is a contract in place between a large company and the user. However, with a standing order, there is no binding contract, and the payments can stop when the user wants them to.

Direct Debit vs Standing Order Conclusion

Overall, while both direct debit and standing order are used to pay people for a service or product, they are very different. When you have your own company, there are a lot of things to consider. Need any help? Contact one of our expert Mortgage House lenders!

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