What is a Continuous Payment Authority (CPA)?
Key takeaways
Continuous Payment Authority, also known as a CPA or recurring card payment, has become a common method for companies to collect payments from customers.
You have the right to cancel a CPA at any time. You can do this with the company taking the payments or by asking your card issuer to stop them.
Your card issuer must stop the payments once you’ve asked them to, even if you haven’t contacted the company first.
Be sure you understand details such as the payment amount, schedule and specific terms upfront to avoid surprises.
CPA is different from a direct debit or standing order because it’s usually linked to your card details rather than your bank account.
CPAs go by various names, including recurring card payments, recurring transactions and regular card payments.
Continuous Payment Authority (CPA) has become a common method for companies to collect payments from customers. Essentially, CPA is a type of permission that you grant to a company, allowing them to take funds from your debit or credit card on a recurring basis.
This arrangement can simplify the payment process for regular transactions, making it a popular choice for both businesses and consumers.
What’s the difference between a CPA and a direct debit or standing order?
Unlike direct debits or standing orders, which are set up through your bank, CPAs are agreements made directly with the merchant.
This means that the company has your card details and can charge the agreed amount as required. It's a subtle but important distinction, as the control mechanism and the party initiating the payment differ from other methods.
A monthly gym subscription is often an example of a CPA. If you get a new debit or credit card, the payment may continue automatically, but this is not always the case. If you rely on the service, it’s worth checking with your card issuer or the company taking the payment.
Contrast this with a regular council tax payment, for example, that might be set up on direct debit from your bank account.
CPA | Standing Order | Direct Debit | |
|---|---|---|---|
Set-up | You enter a contract directly with the merchant, giving them permission to take money through your debit or credit card by providing them with the long number on the front of your card. Amounts may vary, for example, in the case of payday loan repayments. | An agreement with your bank to pay a fixed amount to an individual or company at regular intervals. | You give an organisation permission to collect payments from your bank account. The amount or date can vary, but the organisation must tell you in advance if these change. |
Cancellation | Cancel with the company taking the payment or ask your card issuer to stop it. Your card issuer cannot insist that you contact the company first. If payments are taken after you’ve cancelled, contact your card issuer, as these payments should be treated as unauthorised and refunded immediately. | Can be cancelled through your banking app or by contacting your bank. | Can be cancelled through your banking app or by contacting your bank. If a payment is taken in error, the Direct Debit Guarantee means your bank provides a full refund – and you won’t have to rely on the company to repay you. |
How do I set up a CPA?
Setting up a CPA is straightforward. You can do it online, in person or over the phone by providing your card details to the company.
Before agreeing, make sure you understand how much you’ll pay, how often payments will be taken and whether the amount can vary. A company should only take payments in line with what you agreed when you signed up.
Reputable companies will make your commitment clear and should stick to an agreed timeframe for payments, ie. monthly on a set date.
How do I cancel a CPA?
As a consumer, you have the right to cancel a CPA at any time. You can contact the company taking the payment and ask it to stop, or you can ask your card issuer to cancel the payment.
Once you’ve asked your card issuer to stop the payments, it must do so — even if you haven’t contacted the company first. Your card issuer cannot insist that you contact the company before it takes action.
You should ask for the payment to be cancelled by the end of the business day before your next payment is due. Otherwise, the next payment may still be taken.
Cancelling a CPA does not necessarily cancel your contract with the company. If you still owe money, you should contact the company to settle it, otherwise missed payments could affect your credit rating.
What else are CPAs called?
CPAs go by various names, which can sometimes cause confusion. They are also known as recurring payments, recurring transactions, or regular card payments. Regardless of the terminology, the concept remains the same: they are ongoing payments that you've authorised a company to take from your card.
What type of payments do CPAs cover?
CPAs are widely used for various services, such as:
Annual car insurance payments
Mobile and TV streaming services
Gym memberships
Subscription services
Payday loan repayments
Debt collection agencies
These are just a few examples where CPAs streamline the payment process for recurring charges.
What are the risks of setting up a CPA or recurring payment?
While CPAs offer convenience, they come with their own set of risks:
Unexpected payments if you don’t monitor them closely
Payments continuing after a free trial ends
Payments continuing after you get a replacement card, depending on how your card issuer handles recurring payments
Missed payments if your card details change and the company cannot take the payment
Difficulty keeping track of subscriptions and other regular card payments
Potential issues if a company takes a payment after you’ve asked for the CPA to be cancelled
Will my CPAs be carried over when I switch bank accounts?
CPAs do not work in the same way as direct debits, so you should not assume they will automatically transfer when you switch bank accounts.
If you want a recurring card payment to continue, contact the company taking the payment and update your card details where needed. If you get a replacement card from the same card issuer, some recurring payments may continue, but this is not guaranteed.
Personal Finance & Insurance Expert
Our expert says...
CPAs can be convenient, especially for subscriptions and regular services, but they’re easy to forget about. Free or low-cost trials are a good example, because a higher payment can start once the trial ends.
It’s also worth checking what happens if you get a replacement card. Some recurring card payments may continue automatically, while others might stop until you update your details. If you want to cancel a CPA, you can ask the company or your card issuer to stop the payments.
Other useful guides
For more information on related topics, check out these useful guides:
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