Paying Direct Debits and Standing Orders in Advance


#1

TL;DR – Pay individual recurring payments in advance from the Scheduled Payments section.

It would be great if there was the option to pay recurring payments (Direct Debits and Standing Orders) from the Scheduled Payments section before they are due. Monzo would then pay the recurring payment when it is due using the money paid into each recurring payment.

Possible implementation

  • User navigates to Scheduled Payments section.

  • User selects the recurring payment they want to pay into and is taken to the scheduled payments transaction screen.

  • User selects an option to pay money into the recurring payment and selects how much they want to pay in from their main account. The money is taken from the main account balance and allocated to the recurring payment. The amount allocated is shown next to the recurring payment in the Schedules Payments section.

  • When Monzo pays the recurring payment, the money allocated to it is used to pay it off.

This functionality could be expanded to let people set up scheduled payments to pay off their recurring payments over time, allowing them to choose a payment schedule that suits them (eg: weekly for monthly payments, monthly for annual payments, paying the whole amount off at once on a given date). A way to quickly choose recurring payments then select “Pay total from main account” or similar would allow people with loads of recurring payments to quickly allocate money to them at once.

NB: you’d only be able to pay into recurring payments which are leaving your account (ie: not standing orders to pots or standing orders to other recurring payments.

What happens if the total cost of a recurring payment hasn’t been paid in at the time of payment or too much has been paid in?
– Money in the main account would be used to cover any difference between the amount assigned and the total cost of the recurring payment. If the main account does not contain enough to cover this difference, the recurring payment would be rejected.

– Any excess after the recurring payment has been paid would roll over to count towards the next payment.

How would this work with showing recurring payments due tomorrow in your transaction feed?

  • The amount left to pay would be displayed the day before in the transaction feed (ie: difference between cost of recurring payment and amount assigned to it would be displayed).

How would this work with Summary?

  • Only the amount left to pay into the recurring payment would be used to calculate your spending money.

Why could this be better than paying recurring payments from pots?

  • Leaves pots free for savings and reduces the number of pots needed.

  • Allows the user to prioritise which recurring payments need to be paid first.
    (eg: If someone has a standing order (rent) and two Direct Debits (Netflix, Spotify) going out on the same day, they could assign money to their rent standing order and their Spotify Direct Debit but leave their Netflix to be declined if they don’t have the money to pay for it)

What do people think of this as an alternative to paying recurring payments directly from pots?


#2

I am not a programmer, however, imo, the coding for something as adventurous as this could be an absolute nightmare to perfect, bug free.

Nicely presented UX business plan post though!


#3

I’ve done a bit of programming, although admittedly not enough to consider myself a programmer. I definitely agree that this wouldn’t be easy, but the difficult part would be the same as paying recurring payments from pots. Then each recurring payment would be essentially treated as having its own hidden pot which is used to pay it.

This might take a bit longer to programme than taking recurring payments from pots, but it’s a more elegant solution imo from functionality and a UX perspectives.


(Peter Roberts) #4

My reading of this feature is essentially ringfencing money early for known future transactions. Does that paraphrasing sound about right?


#5

That’s pretty much it.

The main difference from taking recurring payments directly from a pot is that each recurring payment essentially has it’s own pot, allowing people to prioritise their payments and leaving the “pots” section free for savings.