Broadband providers ask to be paid by direct debit

People who have started the search for a new broadband connection will call numerous providers. These days, most internet companies tell you they only charge via direct debit from a bank account or credit card. What does this mean for you as a customer? Is the process safe? Are there any alternative options?

Direct debit is where you provide your Internet Service Provider (ISP) with either your credit card or bank account details (BSB and account number). The internet company then withdraws a specified amount of money for the broadband plan you’ve signed up to on the same date each month. The process is bound by legalities ensuring an ISP cannot take any money out they don’t legally deserve as payment.

Is direct debit safe?


In this modern technological era of cybercrime and online fraud many people are reticent about providing their bank or credit card details to an ISP, be it on the company’s website, or over the phone with a sales consultant. You can rest assured multiple levels of encryption are used to mask your details so a third party won’t be privy to your private information.

Are there alternative ways of paying my bill?

The majority of ISPs only accept payment by direct debit. However, there are a few companies who offer alternatives. iiNet (1300 106 571), Westnet (1300 768 134) and Netspace (1300 115 225) all allow customers to pay via BPAY. Australia’s broadband giants, Telstra BigPond and Optus (1300 780 186), still use the old-fashioned paper bill in the post, which you can pay using multiple methods.

Some ISPs charge for credit cards

While many internet providers don’t have surcharges for credit card payments, some do, so it’s in your best interest to find out each broadband company’s policy if you intend on paying by this method. For example, Exetel charges $1.10 each month for all types of credit cards, while TPG adds 2.75% to your bill (including GST) if you use an American Express or Diner’s Card. With TPG MasterCard and Visa are free.

I’ve heard the rare complaint about too much money being withdrawn?

You may have heard someone over the years complaining about a company withdrawing more money than they were supposed to on the monthly payment date. The usual culprit in this scenario is a customer who isn’t aware of potential excess charges associated with their plan. Make sure when you sign up you are aware of all potential excess fees, and if applicable, at what rate they will be charged.

For example, some ISPs like BigPond charge 15 cents per megabyte on its mobile wireless broadband plans, which works out to $150 if you overuse a single gigabyte. Whereas a provider like Exetel charges 50 cents per gigabyte for excess usage on some its ADSL plans. The only time you’ll get a huge amount of money suddenly taken out of your account is if you aren’t aware of your excess usage charges, and you haven’t been keeping an eye on your usage in your account.

Why are companies using direct debit?

The main reasons ISPs are now using direct debit is they can save money on paper, ink and postage needed for paper billing, as well as the cost of using BPAY services. Direct debit also ensures the broadband provider gets paid by its customers on time. In this era of environmental awareness, electronic billing saves paper wastage, helping companies maintain their green credentials.