Recurring Card Payments

January 31, 2023

Recurring Card Payments

Recurring Card Payments (RCP), sometimes known as a Continuous Payment Authority (CPA) occurs when a consumer gives a Merchant permission to regularly take funds from a debit or credit card.

In theory, once a consumer has established an RCP, a Merchant can access funds at any point. Most RCPs are set up to maintain monthly subscriptions.

Recurring Card Payments vs Direct Debits

With RCPs, Payments are taken using a Consumer’s card details as opposed to their sort code and bank account number. These transactions will show as card payments on a Consumer’s bank statement.

A direct debit is an agreement between a Merchant and a Consumer to automatically take a fixed amount from a bank account on a regular basis. Whilst these payments can vary, they usually occur on a fixed date and at a fixed amount. Direct debits are often confused with a standing order.

Standing orders are a regular payment of a fixed amount a Consumer sets up themselves. As such, they have control over it and can cancel at any time. Standing orders are most used to transfer funds between one bank account to another.

When to use Recurring Card Payments

Recurring Card Payments are useful for Merchants to implement when they require a fast and regular payment processing solution. These payments can be processed either immediately, the same day, or the next day. This is in opposition to direct debits, which may take multiple working days to settle.

Merchants that deal in subscription services, such as gym memberships can benefit from the speedy and efficient way RCPs work.

To learn more about implementing Recurring Card Payments, and how Cardstream can help take your Merchants to the next level, contact us.

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