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Charities Aid Foundation

Regular giving to charity: Direct Debit vs recurring card payment

Online giving has made it quick and simple for donors to give to charities. In fact, according to our UK Giving report, it’s an increasingly common way of giving money to charity.

Frequently online giving comes in the form of one-off, ad hoc donations. But what charities really need is to convert these one-time gifts into regular donations. Regular giving shows a commitment from the donor and gives you the opportunity to build a long-lasting relationship with them. Plus it provides an ongoing source of funds, which enables better planning. A win-win for all concerned!

Charity Direct Debits, standing orders and recurring card payments are the three main ways that charities collect regular donations from supporters. Each one lets you take and manage regular donations from supporters easily. But there are some important differences between them that could impact you and your donors.

We’ve previously compared Direct Debits and standing orders. So let’s look at Direct Debit vs recurring card payments:

The difference for donors

Direct Debit

Direct Debits can be set up online, in person or over the phone.

With Direct Debits donors authorise a charity to take money from their bank account for a fixed or variable amount. This is great for your supporters as their circumstances may change and they may need to amend their charitable giving. Offering supporters the flexibility to reduce or increase the monthly amount may in the long run keep them on board and ensure regular gifts for your work.

A charity Direct Debit also puts your donors in control as they have the right to cancel them at any time by contacting their bank. And the Direct Debit Guarantee protects their money from being taken in error, adding an extra layer of security. This is important for donors. Knowing they are in control of their money and that it’s protected will give them the peace of mind that you’re an organisation that values their relationship.

Recurring card payments

Recurring card payments (also known as continuous payment authorities) can also be set up online, in person or over the phone.

With recurring card payments a charity will ask for a credit or debit card number, rather than bank details. A donor passes these on and gives you authority to take the payments. In this instance the donor’s contract is with you the charity, whereas with a Direct Debit they have instructed their bank and their contract is with the bank.

The one big difference for donors is that cancelling a recurring card payment is not as straightforward as cancelling a Direct Debit. Donors will need to contact you and their bank to ensure no future payments are taken.

Put simply, recurring card payments give the donor less control as they are giving the charity the authority to collect donations.

The difference for charities

Keep supporters on board

One of the benefits of a Direct Debit is that it reduces failed donations. A big issue with receiving regular donations by credit or debit card is that once the card expires the donations will fail at some point.

Credit/debit cards typically have an average 3-4 year life span and it’s been found that the failure rate for recurring card payments is approximately 13%. This is compared to failure rates for Direct Debits which are typically around 1%. Failed payments represent lost funds and potentially damaged relationships with supporters.

But on the flip side what if a donor changes bank account? Does that mean their Direct Debit will fail and you’ll lose the regular donation? The Bacs Current Account Switch Service exists to address this. It allows people to easily transfer their Direct Debits to their new bank account which will hopefully mean that you continue to receive the regular donations.


A further benefit of Direct Debits for charities is its ease of use. When a donor sets one up they agree to pay a recurring donation on a set date. And you will be notified in advance of any changes supporters wish to make, so you can keep on top of the funds coming in. Read more about setting up and managing Direct debits for your charity.


Finally, there’s also a difference in cost between accepting donations by Direct Debit and recurring card payments.

Card payment providers often charge a monthly fee and fees can be around 3% plus 20p per transaction. Some of the well-known fundraising platforms use recurring card payment for regular donations and their fees can range between 1.25% and 1.45%.

Direct Debit bureau costs can vary. Charities will need to apply to a bank’s scheme or work with a provider who can offer the service, such as our own CAF Donate.

In summary

Weighing up the pros and cons of each method, and considering their impact on your supporters, can help you build long term relationships with them.

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