There are several ways to set up regular payments to companies online, all with pro's and con's. We will tackle the most common here.
An organisation has to request the money. Direct Debit is a payment requested from a person or organisation to your bank and can be different amounts or frequencies as agreed by you when setting them up.
It's worth remembering that you must make sure you have enough money in your bank account, if you don't and the Direct Debit tries to take payment you could get fees and it could impact your credit score. We're trying to make things better for you not worse, so keep an eye on your bank account balance.
The bank sends the money. A Standing Order is when a customer tells their bank to pay a set amount, to a named organisation or person, at regular dates (say on the 1st of the month) either for a specific period of time or until cancelled.
Continuous Payment Authority (CPA)
Credit cards don't take payment this way
A continuous payment authority is a popular way of making payment to a company, often for gym subscriptions, internet service providers and even payday loan providers. Unlike Direct Debit or standing order, they can be set up not just from your bank account with your debit card, but also using your credit card.
Our customers often confuse the rights that they have with a continuous payment authority to those accorded to a Direct Debit or standing order.
The problem with this payment method is the company can claim any amount from your bank account at any time, and they use the long number across the front of your card rather than your account number. Some companies respect the flexibility this payment offers and manage it correctly, but many organisations don't, sometimes being hard to contact or saying they'll stop payments at your request but then not doing so.
The FCA opens in a new window website has some useful information and tips if you're signed into a continuous payment authority and details of how to cancel.