Standing Orders Compared
|Criteria||Standing Order||Direct Debit||Credit or debit card||Cash or cheque|
|Set up||Customer/Bank/Provider can all set up.||Bank/provider needed. Merchant controls the setup, payment amount and date.||Provider needed. You’ll need to set up a merchant account.||None|
|Cost||Free for customers or Paydog can setup, track and match for 1.5% Max £5.||Varies. Depends on provider. E.g. GoCardless charges 1% +20p per transaction.||High. Typically 2-3% per payment, plus monthly fees for merchant account.||Free but you should also factor in administration costs|
|Failure rates||Low. Delayed on weekends and Bank Holidays.||Medium ~ 1% with GoCardless. Delayed on weekends and Bank Holidays.||High. Failed payment rates typically >5% due to card expiry, cancellation or spending limits.||Low. Occasional rejections if unsigned or insufficient funds.|
|Flexibility||Medium. Can be for Daily, Weekly, BiWeekly, every 4 weeks, Monthly, Quarterly.|
Amending amount or date requires customer approval.
|Varies. Usually Monthly but depends on DD provider. You can collect variable amounts, change payment amount or date at risk of customer requesting refund under Direct Debit Guarantee.||High. You can collect variable amounts, change payment amount or date without any further authorisation.||Low. You rely on the customer to make a payment, which can involve chasing.|
|Late payment risk||Low. Once set up, low risk, hence used for rental payments.||Low. You can automatically charge customers whenever payment is due.||Low. You can automatically charge customers’ cards whenever payment is due.||High. Not automated and customer has full control.|
|Admin||Low. Assuming your accounting package is connected to your bank or with Paydog you can track and match these monthly payments.||Low. Automatically submit multiple payments at once. Automatically update your accounts. Instant notifications when payments fail. Easily track payments without checking bank statements.||Medium. Once payment is set up, there’s more checking .||High. All manual processes means a lot of admin time for your business.|
|Reversals||Low. Greater protection for merchants.||High. Immediate refund from customer’s bank in the event of an incorrect payment, under the Direct Debit Guarantee.||Medium (for credit cards only). Under section 75 of the new Consumer Credit Act, credit cards must provide protection for purchases above £100 and below £30,000.||None.|
As well as instant payment, Paydog offers merchants the ability to create and track recurring payments using Standing Order.