Recurring Payments Key facts and information
Recurring Payments Recurring payments have been around for years, and are most commonly used for: • Gas and electricity bills. • Magazine subscriptions. • Telephone bills. Now the rise of subscription-based businesses (Netflix, Spotify, LoveFilm) is changing how consumers buy and use things… making recurring payments more popular than ever. In this presentation we take a look three common types of recurring payment methods: • CPAs (Continuous Payment Authorities) • Standing Orders • Direct Debits
Recurring payments - good for businesses, good for consumers For businesses: • • • • •
Less errors than manual payment methods. Time saved through automated invoicing. Increased customer loyalty and retention. More accurate forecasting and planning. Improved cash flow.
For consumers: • • • • •
Better budgeting and visibility of outgoings. Less effort– no need to visit banks or post cheques. No more missed or forgotten payments. Security and guarantees give peace of mind. Money saving discounts often available.
3 common types of recurring payments are: CPAs (Continuous Payment Authorities) - a recurring payment solution fraught with problems… best avoided? Standing Orders – the consumer tells their bank to make regular payments of a fixed amount to another person or businesses. Direct Debits – the consumer gives a business the authority to claim money from their bank account. • A standing order requires the customer's bank to send the money. A Direct Debit requires the beneficiary to claim the money. • A crucial difference between standing orders and Direct Debits is that with a Direct Debit, the retailer can make amendments without the customer's signature.
CPAs (Continuous Payment Authorities) CPAs are fraught with problems and a regular source of consumer complaints. With a CPA, the customer is effectively letting a company take a payment whenever they want! CPAs are commonly used by payday loan companies and adult websites unfortunately, CPAs are popular with dishonest companies who deliberately make it difficult for customers to cancel. CPAs might feel like theyâ€™re Direct Debits, but theyâ€™re not! CPAs do not offer customers the same guarantees as standing orders or Direct Debits.
Standing Orders A standing order is when a consumer instructs their bank to make regular payments of a fixed amount to other people or businesses. Typically, a standing order might be used to pay a fixed amount to a savings or rent account.
As long as the amount doesnâ€™t vary, standing orders can be a good payment option. If the payment amount varies (gas or phone bills, for example) Direct Debits are a better option. If paying a business, it is usually best to opt for a Direct Debit as it offers better consumer protection.
Direct Debits Direct Debits are set up by businesses after the consumer authorizes them to claim money from their bank account. Direct Debits are the simplest and most convenient way for customers to pay regular subscriptions and bills.
â€˘ 80% of the UK population have at least one Direct Debit. â€˘ 67% of household bills are paid by Direct Debit. â€˘ The average UK household has 8 Direct Debits. Consumers are protected under the Direct Debit Guarantee scheme - any amount debited in error is refunded immediately. If a consumer overpays using standing order, they have no guarantees to rely on, and can only hope that the recipient chooses to refund them! A key advantage of Direct Debit over standing orders is that when payment amount changes, businesses can claim the new amount automatically. With a standing order, the consumer needs to give their bank new instructions each time the amount changes.
AccessWallet for recurring payments AccessWallet is a fully secure, cloud-based online payment solution. We make it quick and easy for businesses to collect Direct Debit payments from their customers.
Why choose AccessWallet? • • • • • • • • •
Low transaction fees No set up costs No monthly or hidden costs 100% cloud-based Quick and easy set-up Mobile access Bank-grade security Seamless integration Advanced customer notification
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