1/ A business needs to obtain a Service User Number (a SUN) in order to accept direct debits. These can be tricky to obtain and, in many cases, banks refuse to issue them and push customers towards costly bureau services.
2/ Setting up direct debit arrangements typically requires getting your customers to complete paper forms. Recurring card payments can be set up electronically.
3/ A direct debit system requires a BACS connection to the bank to initiate each payment run. Recurring card payments uses your internet connection.
4/ Failed or returned direct debits cost your customers money. Banks impose punitive charges if there are insufficient funds available in your customers' accounts. Recurring card payment requests are simply declined if the card holder has insufficient funds. Neither the card holder or your business incur any charges.
5/ Card holders typically have more than one card. If a recurring card payment request fails, card holders can be asked to use an alternative card. This process is fully automated.
6/ Many account holders simply refuse to sign direct debit mandates because they instinctively distrust the system.
7/ Bank account holders can reclaim funds paid by direct debit for the life of the mandate. If someone pays for 5 years they can simply ask their bank to return all of the money they have paid. This liability is limited to 120 days using recurring card payments.