I have recently switched all of my banking over to Monzo. This was a manual process due to the account being a joint account. One thing I noticed in all of this is just how archaic Direct Debits are. It amazes me that the switch can take three to five days and feels very dated. I’d be interested to know if there is any plans in the industry to speed this up i.e. you go to a companies website and change the Direct Debit details and the switch happens instantly. It also frustrated me that if a Direct Debit was about to happen you had to wait sometimes a week before you can change it, even though the money had not come out.
Direct Debits also seem very insecure. People share bank details all the time to send money, so what is stopping someone using this information to take direct debits from people’s accounts without permission?
I’d be amazed that there isn’t a new standard on the horizon that works with open banking that links everything together securely and instantly.
There are plans to improve the BACS and faster payments solutions following a review by the payment services regulator recently but probably not see anything until after 2020 and it’s unclear what these changes will mean. Unlikely we will see a change to the 3 working day cycle used in BACS but we may well see new entrants to the payments market
In terms of security the direct debit guarantee protects you from all unauthorised direct debit payments
Nothing. But the Direct Debit guarantee will prevent you from losing any money. Hopefully.
It’s a system which has been working for a long time without major problems, so I guess ‘they’ are reluctant to change it.
This is definitely one of the things that I had no clue about before Monzo. It’s amazing just how old fashioned and slow Direct Debits are
I was also amazed that my old bank (Natwest) had direct debits associated with the account that were not listed as they hadn’t taken any money - I had no idea they existed!
I love that Monzo notifies you when they are set up
Totally agree. I also like the day before notification in the feed. I also like that they notify if you won’t have enough funds to meet the payment. Puts legacy banks to shame.
The whole system is currently undergoing major changes, with all the payment processes controlled by one company. What it means as a consumer, right now not much, but in the next year or so there will be improvements to the system, with some legacy processes going or being changed.
the reason why there isn’t much fraud with people using your account details with direct debits, is that your covered by the direct debit guarantee
Also until GoCardlsss came along there wasn’t an easy way or cheap way for companies to collect payment by DD. However even GoCardless do KYC checks so it wouldn’t be hard to track fraud I think
Sorry to revive an old thread, but I didn’t feel like this deserved a new thread.
If you switch a DD away from Monzo, does it disappear from your list on Monzo?
It was very good to see them pop up with an “in feed notification”, as it gave some visibility to what would have been an invisible task otherwise.
But is it as good when switching a DD away from Monzo?