Paying bills is already, by its very own nature, not something we look forward to. Add to it the bother of sending cheques by mail, having to go to your service providers’ office to pay them directly, or waiting behind a long and winding queue at the bank, and what was a bothersome task becomes an inconvenience that costs you time and money.

Direct debit takes away a lot of the hassle involved in paying bills. Not only that, but with direct debit, it’s much easier to keep track of your bills and payments.

A lot of people confuse a standing order with a direct debit – however, the two are different. With a standing order, only you can change the date or payment amount. Moreover, a standing order might carry a bank charge. On the other hand, direct debit doesn’t carry any bank charges and details can be changed by the service provider as well.

In a nutshell, a direct debit is an agreement between you and a service provider to withdraw money from your bank account. Through this agreement, you are giving the service provider the authority to withdraw a variable or fixed amount of money from your bank account. This withdrawal can either be a one-off occurrence or a periodic one on a particular date every month, quarter or year.

This agreement also binds the service provider to give you prior notice of the withdrawal amount and date. In the case that the service provider wants to change an amount or the date of collection, you will be informed as well.

Apart from ease of use and savings on time and fees, direct debits are simple to manage. Not only can you keep track of regular payments from your account, but your bank will also monitor the efficiency and security of your direct debits.

Things will always go wrong. The issue is not things going wrong, but how you can make them right. With direct debits, in the event of an error, you have the right to ask your bank to immediately reverse the amount of the transaction. You should also inform your service provider on becoming aware of any incorrectly executed payment transaction. If you deny having authorised an executed payment transaction, it is the responsibility of the service provider to prove that the payment transaction was properly authorised, accurately recorded, and not affected by a technical breakdown or some other deficiency.

You can also cancel a direct debit at any time. In such cases, you don’t need to justify your decision with your bank.

Setting up a direct debit

• Contact the service provider that you wish to pay and ask to set up a direct debit. You will be required to complete a direct debit mandate form.

• Complete the direct debit mandate form with your personal details, including name and surname, address, ID or passport number, your bank account details and type of payment.

• The direct debit mandate form can be signed in triplicate: by you, your bank and your service provider.

• The service provider will update its payment records and forward the instructions to your bank. It will then collect the agreed amount on the agreed date.

• The service provider will give you advance notice of collection dates and amounts. Check if these details are correct and contact the service provider straight away if you want to query anything.

• Apart from making sure you have enough money in your account when payment is due, as you will most probably be charged by your bank when funds are not sufficient, there’s nothing more you have to do. Just keep an eye on your bank statement to check that the direct debits are being made as agreed.

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