Standing order

(banking)

A standing order (or a standing

instruction) is an instruction a bank
account holder ("the payer") gives to their
bank to pay a set amount at regular
intervals to another's ("the payee's")
account. The instruction is sometimes
known as a banker's order.
They are typically used to pay rent,
mortgage or any other fixed regular
payments. Because the amounts paid are
fixed, a standing order is not usually
suitable for paying variable bills such as
credit cards or gas and electricity bills.

Standing orders are available in the

banking systems of a number of countries,
including Germany, Bulgaria, the United
Kingdom, Barbados, Ireland, India,
Netherlands, Russia, Pakistan, Malaysia,
Ukraine, Sri Lanka and presumably many
others. In the United States, and other
countries where cheques are more popular
than bank transfers, a similar service is
available, in which the bank automatically
mails a cheque to the specified payee.

Country differences

Germany …

A standing order (Dauerauftrag) can run for

a set number of payments, a set period of
time, or until cancelled.

The Netherlands …

Standing orders (periodieke

overschrijvingen) are available for a set
period of time or until cancelled, to any
recipient in the SEPA space. They should
not be confused with doorlopende
machtigingen (periodic direct debits).

Japan …

A standing order ( ⼝座⾃動振替) runs until

cancelled. They can be cancelled at the
account holder's request.

New Zealand …

Commonly known as "Automatic Payment"

and can be set up via a bank teller at a
branch of the bank, or via the internet
banking service of most major banks.
South Korea …

A standing order ( 납부자자동이체) runs

until cancelled. They can be cancelled at
the account holder's request. The bank
charges fees (average 3000KRW) per
transfer.

Spain …

With most Spanish banks a standing order

(transferencia periódica) can be set up to
run for a set period of time, for a number
of occurrences or indefinitely. They can be
cancelled at any time at the account
holder's request. There are typically no
fees for such transactions.

Switzerland …

In Switzerland standing orders are

available for a set period of time or until
cancelled. They can be made to any
recipient in the SEPA space.

UK & Ireland …

A standing order can be set up to run for a

set period of time, or indefinitely, and can
be cancelled at the account holder's
request. Standing orders are standardized
by the trade body UK Payments
Administration. In 2008 a number of banks
began to introduce Faster Payments as
the method of transfer for standing orders
when available, in place of the slower
BACS system; with this method payments
reach the receiving account the same day,
rather than after a delay of three days or
more.[1]

Difference from direct debit

Standing orders are distinct from direct
debits; both are methods of setting up
repeated transfers of money from one
account to another, but they operate in
different ways. The fundamental
difference is that standing orders send
payments arranged by the payer, while
direct debits are specified and collected by
the payee.[2]

A standing order can be set up and

modified only by the payer, and is for
amounts specified by the payer to be
paid at specified times (usually a fixed
amount at a specified interval
examples). The amount can be paid into
any bank account, which need not
belong to an organisation vetted by the
payer's bank.
A direct debit requires the payer
authorize the payee take a direct debit
for any amount at any time, or to
instruct the bank to honour direct debit
requests from a specified payee. The
payee has full control over the
payments. They can vary the amount
and frequency of payments without
further authorisation from the customer
(subject to providing the customer with
the required advance notice).[3] The
payer has no direct control over these
payments, but can cancel the direct
debit at any time, with no reason
required, and require the return of
disputed payments. It is not possible to
 authorise an individual to take direct
debits; only organisations that have a
contract with the payer's bank, or have
been vetted by it, can do this.

See also
Overdraft

References
1. "UK Payments Administration -
Standing Orders" ., UK Payments
2. "Standing order vs Direct Debit" .
SmartDebit. 2012-04-19. Retrieved
2017-07-05.
3. "Standing Order vs Direct Debit" .
GoCardless. Retrieved 10 April 2014.
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Last edited 10 months ago by John of Reading

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