6 Benefits of Paying by Direct Debit
The benefits of making payments by direct debit are endless and they affect everyone – not just businesses. Here we take a look at 6 reasons why you should think about making regular payments using this method.
1) Late Payments
Recent figures from BACS (Bankers Automated Clearing Services) Payments Schemes Ltd have unveiled that late payments are causing some enterprises to go out of business. It is estimated that in the UK alone £30 billion is owed to businesses in late payments and the main culprits are large, national and multinational companies. With America’s superior size this figure is likely to be much higher, especially considering there is currently no US law on late payments. By using direct debit services late payments can be eradicated and unnecessary debts avoided. The service ensures that all owed payments are made on the correct date with no issues of late payments.
What Is Happening to Debit Rewards Programs? by BankSimple, on Flickr. This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
2) Cheaper Household Bills
Most energy companies offer their customers a choice of when to pay their bills; monthly, quarterly or annually. They will also give the option of how to pay the bills and the cheapest option, the majority of the time, is by monthly direct debit because the energy companies discount the customers who wish to pay this way as it is easier for them to manage. If you choose to use this method of payment, ensure that you give you supplier regular gas and electric meter readings so that your bills are correct.
3) Saves Administrative Costs
Other methods of payment bring along with them arduous administrative costs; sending paper bills, cashing checks and postage to name a few. Payment via direct debit eliminates these costs and also, as mentioned earlier, sidesteps the costs of having to chase late payments, which can become expensive if a particular payment issue is ongoing.
4) Select Date
From a personal perspective, if you have a certain amount of money exiting your account every month then it is convenient to know when that is going to happen. With direct debit payments the date is the same every month. Not only is the date the same, but you also get to choose when that particular date is, which is hugely beneficial to your financial planning.
itkannan4u / Pixabay
5) Peace of Mind
Direct debit is the safest way to make a payment, not only that it is reliable and convenient. You need not lose sleep about missed deadlines or remembering to process a payment because there are certain safe guards in place, which protect your payment in the rare event of an error.
6) Time Saving
The convenience of direct debit payments is the main attraction to most users. The money leaves your account on a day that you have agreed and there is no need to waste time organizing the payment.
In the USA direct debit transactions are processed by ACH (Automated Clearing House), an electronic network for financial transactions. Utilizing ACH payments is cheaper and faster and many B2B and B2C e-commerce payment activities rely heavily on the system.
