Direct debit emerged and became popular because of online services that are available today. It is a financial transaction of withdrawing funds from another’s account. This is a method where an account holder allows or authorizes the bank to pay a fixed amount meant for a service on a regular basis.
Today more and more individuals who use online services utilize this payment approach simply because it brings convenience.
Direct Debit Payments
Let’s take a look at the pros and cons of direct debit payments.
Pros:
- Convenience – It is convenient on both parties the customer and the online service provider. There is no need to make face-to-face payments; physical appearance is not needed.
- Late and missed payments are avoided – This can happen to anyone, because of busy schedules, consumers sometimes have difficulties with regards to payment. If you have a busy life, direct debit payment method is ideal for you.
- Save time – You don’t have to make payments by yourself. By having an arrangement with your bank, you are allowing them to pay for an item or service without requiring yourself to be physically present.
- Save money – No need to write and send checks. You get to save cash from postage costs and envelopes.
- Easy tracking of payment history – It makes it easier for account holders to monitor payment histories.
- Security – When payments are automated, you don’t need to carry around large sums of cash when you go out. You can keep your account details secure and always keep track of every dollar you spend.
Cons:
- Late deposit – Bank account holders must provide sufficient amount of funds in their bank accounts to ensure that payments go smoothly. Some prefer the traditional method of payment simply because they can control the payments especially when their expected checks do not arrive on time. It is the bank account holder’s responsibility to ensure that there are sufficient funds to cover the coming expenses or bills. Without control, you might find yourself overdrawn.
- Incorrect payments – You can be wrongly charged. If you feel that there is something wrong with the payment, coordinate with the bank and fix it immediately.
- You still need to track payments – Yes it is easy to track payment history but one must be aware of the money that comes in and out of their bank accounts.
