Direct Debit Charges - Cost To Banks To Process

[Iggle Piggle]

Hi, sorry I know it's a bank holiday but I have a question...
Does anyone work in a a bank and know how much it actually costs a bank to process a direct debit versus cheque versus standing order etc?

Just wondering as my telephone company charge £4.50 a month as we pay by standing order (so we have full control). There would be no charge if we paid by Direct Debit.

Thanks!

[fiction-factory]

Probably no difference in costs to the bank. It's more to do with the phone company trying to encourage people to choose DD over SO since they have more control over the DD and, unlike SOs, there's no risk of you paying less/nothing sometimes or paying late

[hc4361]

As fiction-factory says, no difference in the bank charges but the £4.50 a month you pay is to cover the extra admin costs to the company of you paying by standing order.

I suspect they charge that fee for paying by cheque, too. They will argue that they are not penalising you for paying by SO or cheque but giving a discount to those that pay by DD.

You have just as much control over your DDs as you do your SOs. You can cancel a DD through your bank at any time; you can set the payment date; you must be given notice of any alteration of the amount you pay each month.