People all over Australia receive a large percentage of their income through Direct Debit, in one way or another. This may be a regular payment to a utility provider, such as an electricity company, or it could be for rent from a landlord. In many cases, it is simply the best option for transferring money from individual A to individual B when these two do not share a bank account.
There are different types of direct debit services in Australia. These differ based on where they come from and who they are being paid to.
1) Set up by an individual
This type of service allows someone to pay somebody else’s bills with just a few clicks on their phone or computer. For example, if person A wants person B to send them $50 for petrol every month, person A can set up a direct debit service with their mobile provider or bank to automatically send $50 to person B each time.
This type of service is virtually the same as setting up by an individual except that it goes through business instead of personal accounts. Instead of using your own money, money would be transferred from the business’s main account into another account specifically for this purpose.
2) Set up by an organisation (e.g. electricity company)
These are the most common type of direct debit services in Australia. They automatically withdraw money from someone’s account for a product or service they have signed up for, such as utilities like gas and electricity or charitable organisations like St Vinnies. The company needs the customer’s banking details to send the money to them without any hassle.
3) Set up by an organisation (e.g. electricity company) through payroll deduction
This type of direct debit service is often used in organisations that employ large numbers of people who earn relatively low wages, for example, retail or hospitality workers. Employees can sign up to have their pay automatically sent to another account every week, fortnight, or month. The business will make small deductions throughout the day (often at midnight) to ensure it doesn’t miss any payments. The employer has access to all their employee’s banking details, so they only need the person’s permission to set up this Australia direct debit service providers.
4) Set up by an organisation (e.g. charity) through government benefits like Family Tax Benefit
Government benefits are not one specific type of direct debit service as they can be used for various things. In Australia, the Family Tax Benefit is one type of government benefit which might use a direct debit service to automatically send money from your bank to another account every fortnight.
5) Set up by an organisation (e.g. electricity company) through pension or superannuation payments
Pension and superannuation services often use direct debit systems to ensure that the correct amount goes into a customer’s account without any delay. Superannuation is paid after someone retires at 65 years old, and it is usually transferred monthly. In contrast, pensions are generally paid weekly, so these transfers also use this type of direct debit service.
The Direct Debit system is a popular payment method in Australia. If you’re looking for an easy way to collect funds from your customers, direct debit services may be just the thing for you.
