31
Jan
2020

What is a Direct Debit and What is it Used for

Making monthly payments sounds easy but could become boring at some point. There is no need to go through that process when this can be cut off automatically when the payment date is due. Using the direct debit method is what most people always opt for when they have to make regular payments for any product or service.

A good payment solutions provider enlightens customers on all they need to know before using the debit card option.

What then is a direct debit?

A direct debit gives a person or an organization the power to take payment from an account when payments are due. Filling the instruction form is all that needs to be done; it could be either a paper form that needs to be done manually or an online form. 

With this authorization, the company takes out their payments automatically when it is time for them to get paid. The organization has to comply with the rules before the debits can be processed. There is usually an immediate refund should in case the payment is incorrect by the payment solutions provider.

Direct debits are the simplest, most secure and quickest means of carrying on with regular payments reason why it is mostly utilized for compulsory things council taxes and utility bills.

What are the direct debits used for?

Direct debits can be used to pay for a whole lot of things. The amount is usually fixed and regular and can be for things like; mortgage payments, utility bills, or any other bill that needs to be sorted out.

Frequent bills payment

Using a direct debit will endeavor all essential bills like taxes are paid for every month. 

Fixed subscriptions or memberships 

Direct debits are the quickest and most secure means of making regular payments for a gym membership or even that favorite magazine.

Paying on account 

Some companies will offer Direct Debit as an alternative for distributing costs or paying on account.

Direct Debit can equally be utilized for one-off payments too

Direct debits are often connected with fixed and frequent payments and it can equally be utilized for one-off payments. But do not use direct debits for one-off payments that need instant transfers like e-commerce. But if the company does not need the money urgently, then using a direct debit can work it just fine.

Important things to note about direct debits

The date each payment has to be done must be made known in advance.
All incorrect payments are fully refunded thus there is full guarantee the funds are safe.

It is affordable, secure and easy to use

Since payments are automatic, bills are easily remembered; neither do they get missing or delayed.
Some businesses may even offer incentives for those paying using debit cards
It is one of the safe means of making payments in many parts of the world.

Conclusion

Direct debit is for anyone looking for fast and convenient means of dealing with their compulsory and regular payments. It saves time and stress plus funds are secured and clients are sure of reimbursement in case there is an incorrect payment.

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