A standing order is an automatic payment method, where a person or business directs its bank to pay another person or company a fixed amount at regular intervals. The payer controls the standalone order. They set it up themselves and chose quantity and frequency. Standing orders are made to be fulfilled for a specified period or until it is canceled. Standing orders differ from direct debit payments. A standing order is a directive from the payer to their bank asking their bank to ‘push’ funds to another person or organization. People often don’t understand standing order vs. direct debit.
Conversely, when you set up a direct debit, the payment recipient person or organization repeatedly asks the payer to ‘withdraw’ funds from their account. Various small businesses collect regular payments from customers via stand order. It usually costs nothing to receive compensation by standing order. Once the order is issued and executed, the business can easily assure that the payment will be credited automatically, so it is received timely. Yet, there are drawbacks: a customer can change or cancel a payment without informing you, so you have to rely on them for this section’s facts.
Setting Up a Standing Order
In the first stage, the payer must contact his bank to apply. With some banks and architecture societies, standing orders can be placed online or over the phone. The payer then completes the standing order form (paper or online) and submits it to his bank. This will include the account number and details of setting up the code for the person or organization being paid. Banks usually do not charge the payer or recipient for placing or using the order. It is essential to consider that customers can cancel a standing order at any time or change the amount or payment date. Standing orders are made to be fulfilled for a specified period or until it is canceled.
