4 min read

Direct Debits or CPA: What's the difference?

Close up of a chip and pin bank payment card

Direct Debit or Continuous Payment Authority? At first glance, it’s probably not the kind of conundrum keeping you up at night. However, don’t dismiss it so quickly! Since they’re both methods of making recurring payments, they are extremely useful ways of encouraging return customers and improving audience loyalty. In addition, though it might seem like they basically do the same thing, they actually do it in slightly different ways - and this can have an impact on audience loyalty, administration, reliability and the customer experience. So when you’re researching ticketing software and weighing up the pros and cons of their offerings, you should always take the payment processing type they use into consideration.

Here at Spektrix, we use Continuous Payment Authority (or CPA) so that customers can automatically renew their memberships. However, we’re not here to present you with a biased opinion. We’re going to talk you through each payment type, and the pros and cons associated with each to help you understand the differences. Thinking about what’s important to your organisation is usually enough to help you land on one side or the other.

What is CPA?

Continuous Payment Authority is when a customer authorises a business to withdraw money from a customer's card repeatedly without having to ask for authorisation for each payment.

What is Direct Debit?

Direct Debit is when a customer instructs their bank to let a business to withdraw money directly from their bank account repeatedly without having to ask authorisation for each payment.

What's the difference?

If they sound similar, that’s because they are. The main difference is that with CPA, the customer has a contract with the business. With Direct Debit, the customer has a contract with  the bank or credit card company.

When are arts organisations likely to use them?

Most arts organisations will use either one of these in situations where you want to allow customers to make automatically recurring payments to your organisation. For example, to automatically renew memberships, purchase seat subscriptions, or make regular donations. 

Which one do my customers prefer?

The average customer probably wouldn’t have a preference. However, some of your more consumer-savvy customers will be aware of the difference so it might be worth thinking about how your customers perceive Direct Debits versus CPA, so that they’re more likely to take up recurring payments. 

Direct Debit has been around for a while so benefits from the perception that it is trustworthy. Continuous card payment authority is used by large reputable companies including Transport for London (for Oyster card automatic top-ups), O2 and the AA. However, a few rogue businesses have taken advantage of the lack of knowledge that consumers have regarding their cancellation rights with CPA. Some of your potential customers will be wary of CPA for that reason, believing that CPA gives businesses the right to keep taking payments even when the customer doesn’t want them to. 

This is not the case however, as customers can cancel any future transaction at any time up to close of business on the preceding day. The transaction can be cancelled either with the trader or the payment service provider (the customer's bank or card issuer). To ease any negative customer perceptions, put their minds at rest by providing clear and easy-to-follow instructions for cancelling in line with current regulations. 

Preferred by consumers… at the moment, probably Direct Debit. However, clear communication from your organisation regarding the cancellation process should be used for both payment types and will help put your more worrisome customers at ease with CPA. 

Which one provides the best customer experience?

From a customer perspective, they both work in the same way and there’s very little difference. They can hardly notice whether the money comes from their bank or their card. Setting up a Direct Debit can sometimes require paperwork which is laborious, and can make it feel like they’re making a more significant financial commitment than they really are - especially for customers with a ‘digital first’ mentality. CPA doesn’t require any paperwork and can be set up online just by checking a box at the checkout. This is easier for your customer, and makes it more likely that they’ll sign up for recurring payments. 

On the other hand, Direct Debit comes with a Direct Debit Guarantee scheme which will provide the customer with a full and immediate refund in the event of any error processing a payment. With CPA, customers aren’t included in the scheme. However, your organisation can mitigate this by offering the same benefit in the event of any processing errors. 

Best for customer experience… it depends on what your customers prefer, and on how much responsibility for the customer experience your organisation is willing to take on. 

Which one is best for reducing administration?

With Direct Debit, any organisation wishing to offer paperless direct debit services (PDD) must first gain an automatic direct debit instruction system (AUDDIS) status. Organisations must meet the vetting criteria including financial and technical checks. By contrast, CPA is easy for organisations to set up and generally does not require dedicated resource or additional training to manage.

Best for easy administration...CPA. 

Which one provides more reliable payments?

Once Direct Debit is set up, settlement processing times can make reconciliation complicated. What’s more, depending on internal processes, Direct Debits can be returned unpaid after service has been provided e.g. a membership might get activated straightaway upon joining, but the payment might fail a few days later after they have already benefited from the membership. With CPA, the immediate authorization or rejection of the payment request through the card makes reconciliation process straightforward. As a result, CPA is a much more contemporary approach to recurring payments. 

Best for reliability... that would be CPA again. 

At Spektrix, we think it makes sense to provide CPA payment to the organisations we work with because it’s contemporary with consumer trends, because we feel arts organisations should save administration time wherever possible and because it benefits both the audience and the organisation. When choosing a ticketing software supplier, make sure you ask them how recurring payments are handled, and their reasons for choosing this method. Then consider what’s important to your organisation to decide whether Direct Debit or CPA is the way to go for your organisation.


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Paul McGuinness is Head of Client Relations for Spektrix in the UK and Ireland

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