Direct Debit: Assists with budgeting as Payment level may be the same amount is paid insufficient/too high Monthly / each month/quarter Consumers must manage quarterly (avoids unexpected high their bank accounts to bills) ensure that there are Tends to be the cheapest sufficient funds every month payment method budgeting more Payments are protected by difficult if the amount is not the direct debit scheme fixed (will usually be high in (e.g. immediate refunds for winter and lower in Variable payment errors and notice summer) of any changes) Consumers can cancel at any time Consumers pay for their energy based on actual usage Monthly Assists with budgeting as Consumers might need to /quarterly the same amount is paid complete a form for the standing order each (avoids bank each time the payment unexpected high bills) needs to be changed Payments cannot be taken by the supplier in error Continuous Consumers can benefit Consumers are not arrangement from the free’ protected in the same way ‘interest period provided by the as they are for direct debit relevant card (sometimes schemes (e.g. against up to 56 days) unauthorised withdrawals) Cards may offer Expensive way of paying, if reward/loyalty points consumers don’t pay off the balance during the interest free period Consumers control when Tends to be more expensive On demand (cash/ cheque/ they pay their bill than paying by direct debit debit card/ credit Risk of late payment, which card) may incur a late payment charge Quick reference guide: payment methods for prepayment meters Method Advantages Disadvantages
Direct Debit: Monthly / quarterly Variable Assists with budgeting as the same amount is paid each month/quarter (avoids unexpected high bills) Tends to be the cheapest payment method Payments are protected by the direct debit scheme (e.g. immediate refunds for payment errors and notice of any changes) Consumers can cancel at any time Consumers pay for their energy based on actual usage Payment level may be insufficient/too high Consumers must manage their bank accounts to ensure that there are sufficient funds every month budgeting more difficult if the amount is not fixed (will usually be high in winter and lower in summer) Monthly /quarterly standing order Assists with budgeting as the same amount is paid each (avoids unexpected high bills) Payments cannot be taken by the supplier in error Consumers might need to complete a form for the bank each time the payment needs to be changed Continuous arrangement Consumers can benefit from the ‘interest free’ period provided by the relevant card (sometimes up to 56 days) Cards may offer reward/loyalty points Consumers are not protected in the same way as they are for direct debit schemes (e.g. against unauthorised withdrawals) Expensive way of paying, if consumers don’t pay off the balance during the interest free period On demand (cash/ cheque/ debit card/ credit card) Consumers control when they pay their bill Tends to be more expensive than paying by direct debit Risk of late payment, which may incur a late payment charge Quick reference guide: payment methods for prepayment meters Method Advantages Disadvantages
EBDfacilitatorbackgroundnotes2016-17.docx.docx