A direct debit is a secured means of making regular payments and is increasingly gaining popularity in different parts of the world. Many companies are making use of the payment method, this includes business to business and business to consumers.
Banks and institutions make setting up the payment method easy. It could be used to handle necessities like; utility bills, monthly insurance premiums and even mortgage payments that need to be taken care of every month.
Though it is very convenient to use, a direct debit equally has some limitations which may make it not suitable for all cases. Payment solutions provider sometimes have flexible payment plans where they accept both manual and direct debit payment methods.
Advantages of direct debits
The major benefit of a direct debit is its convenience. The ease at which repeated payments can be carried out without the need to write and issue checks or checking out mails, filling forms or going to apps or websites to make payments.
A blessing for people who easily forget
Going through daily activities makes it quite cumbersome for some people to remember some of their subscriptions which can result in extra charges. With a direct debit, there will be no need to be constantly checking a bill to remember the date to avoid any delayed payment.
With a direct bill, postage bills can be avoided since they will be no need for mails that can reserve some funds. Some companies will offer discounts to clients who opt to use the direct debit method of payment.
Easy to track
Using a direct debit method of payment makes it easy to keep track of payments. All that needs to be done is logging into the account and get a listing of when each transaction was made. Payments are usually automatic thus it is easy to get payment histories.
Thus having a clear verification of when payments were made and when it was done. This can be quite helpful when there is a need for any clarification with payment issues with any payment solutions provider Irrespective of the many benefits that a direct debit has, it equally has some limitations which people need to be aware of.
Limitations of a direct debit
The control process
Though there is a need to write and issue checks, direct debits still need tracking and not doing so could leave a checking account in disorder.
Making changes when using a direct debit payment can be sometimes stressful and difficult. If there is a need to alternate payment dates, it could take some time for the changes to be made which can cause some delays.
This limitation makes people to sometimes prefer the manual method of issuing payments than the automatic process with a direct debit. Some people can even forget to take out the money from the check register or even lose track of the bill payment process.