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Difference debit credit5/23/2023 ![]() Payment timing: Recurring card payments offer immediate or next-day clearance, while Direct Debit may take several business days to clear.Ĭancellation: Customers can cancel a Direct Debit directly through the bank, while recurring card payment accounts must be closed with the organisation. Source of funds: Direct Debit is pulled from a bank account, while recurring card payments are charged to the credit or debit card account. Now that we’ve covered their main uses and similarities, what is the difference between Direct Debit and recurring payment? Here’s how the two split apart: What is the difference between recurring payment and Direct Debit? Both can be used to make regular payments of fixed or variable amounts, as well as one-off future payments. The purpose of recurring payment vs Direct Debit is quite similar. To set up repayments with payday loan companies To pay for higher value goods or foreign currency To pay for subscription services that need fast clearance Recurring card payments are most frequently used: To spread the cost of a larger purchase on account To pay for subscription services like gym memberships or streaming content ![]() To pay utility bills and council taxes on a recurring date each month Uses of Direct Debit vs recurring paymentīoth payment methods can be used in a variety of situations. One difference between recurring payments and Direct Debit is that the customer provides credit card details rather than bank details for authorisation. Instead of a bank account, payments are pulled via a debit or credit card until the arrangement is cancelled. Like Direct Debit, they are taken with authorisation taken from the customer. Recurring card payments are also referred to as a Continuous Payment Authority (CPA). With this authorisation, the organisation can collect regular or one-off payments as needed. This is done with the full permission of the customer, who must complete a Direct Debit Mandate form either on paper or online. It’s a pull-based payment method authorising payments to be taken as they’re due. What is a Direct Debit?Ī Direct Debit gives a business the authority to pull money directly from the customer’s bank account. Here’s what to consider when comparing a recurring payment vs Direct Debit system. While both recurring card payments and Direct Debit enable a regular payment plan, there are differences between the two. It helps to weigh up the difference between Direct Debit and recurring payments as part of this process. If your business takes regular payments from customers, you’ll need to find a convenient, secure processing method.
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