Making regular payments
Cardholders are increasingly using their cards to pay for goods and services where regular payments are needed, such as an annual subscription to a health club or monthly payments to an internet service provider.
There are different ways you can make and manage regular payments, such as by Direct Debit or standing order, but when you authorise a retailer or organisation to claim regular payments from your credit or debit card it is called a recurring transaction or continuous payment authority. There are important differences between recurring transactions, Direct Debits and standing orders:
A Direct Debit is a permission that you give to your bank or building society to make regular payments. These come from your current account and are at the request, and to the account of a specified organisation. This type of payment is subject to the Direct Debit Guarantee which includes a refund guarantee. A Direct Debit can be cancelled at any time by customers informing their bank or building society, usually in writing, to stop the arrangement. It is advisable to inform the supplier as well, but this is not obligatory, as the bank or building society will also do it.
A standing order is an instruction you give to your bank or building society to make payments from a current account, usually on a regular basis, to a specified bank account in the UK. If you wish to change the amount or date of the arrangement, you need to give your bank or building society a new standing order instruction, not forgetting to cancel the earlier instruction at the same time.
If you would like more information about Direct Debits, standing orders and other types of automated payments please go to www.payyourway.org.uk