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Created on 11.07.2019

Direct debit schemes: the advantages and disadvantages at a glance

There are many ways to pay your outstanding bills. If a recurring payment is to be deducted from your account every month, it can be worthwhile thinking about options like direct debit schemes, standing orders and e-bills.

“Never put off until tomorrow what you can do today” – and this is especially important for debts, in other words, bills! People with their outstanding payments under control have healthy finances. The principle is that simple. But with the daily flood of envelopes through the letterbox, it's not always easy to maintain an overview of ongoing costs. This is why services like direct debit schemes / electronic direct debit schemes, standing orders and of course e-bills were developed to simplify and as far as possible to automate individual payment transactions. As a customer of PostFinance or another bank, you should know which of these processes makes most sense for you on which occasion. But first an overview of what these three options basically involve:

Standing order

You set it up yourself. Then the transfer is made regularly from your account to another account. This is suitable for your rent or gym subscription, for example. More information on this can be found under “Standing order: for regular payments”.

Direct debit schemes (LSV) or electronic direct debit schemes (ELV)

You request an authorization form for the direct debit from the invoice issuer. By signing the form, you authorize the invoice issuer to debit the outstanding invoice amounts directly from your account on the due date. This is known as a payment authorization. You can find out how this works both here in the text and on page “Debits: for recurring bills”.

Electronic bill

This allows you to receive bills and make payments conveniently using online banking (e-finance at PostFinance). This method is suitable for both recurring payments and irregular payments. More about e-bills can be found under “e-bills: receiving and paying bills electronically” and in the text below.

Now for some detail: when are direct debit schemes (LSV) / electronic direct debit schemes (ELV) suitable?

Direct debit schemes (LSV) are also suitable when recurring payment amounts can vary. Your telephone bill, for example: your provider or retailer has permission to debit the amount of the bill directly without any counter checks or additional permission. You have the right to cancel debits by written instruction to the financial institution within 30 days of dispatch of the account statement.

When are electronic bills suitable?

In contrast to direct debit schemes, with electronic invoices you can check the pending payment and give consent for the amount to be debited. This means that money cannot be debited immediately from your account, as is the case with the direct debit scheme. To receive electronic bills, one-off registration with the invoice issuer is required. This process saves you time, paper and money. You can access the outstanding claims from anywhere. You can be notified as soon as a new pending payment arises in e-finance.

The future-friendly option

Hand on heart, paying outstanding balances certainly isn't something that we're happy to do: getting the post, sorting it and getting organized to pay via e-finance or even going to pay a bill at the counter – it can take quite a lot of time and effort. It also means that you no longer have that amount available in your own wallet. It's all part of the process but sometimes it still hurts. There are many ways to automate payment transactions.

The simplest and most future-friendly option is via electronic bills. You can settle your debts with retailers, telephone providers, landlords and even the government and local authorities with just a few clicks. What’s more, you can keep careful track of what is debited from your account – you click to give your approval for each payment. Notifications always let you know when a new bill has arrived. You can access this information anytime and anywhere.

Find out more about e-bills in the article “Receive e-bills easily – leave paper bills behind”.

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