What is Continuous Payment Authority?

Last updated on May 20th, 2026 at 04:29 pm

Continuous payment authority refers to the way companies are able to collect repayments from customers using a recurring payment method. Similar to setting up a direct debit, using continuous payment authority is common for companies collecting repayments for things like payday loans, gym memberships and even subscriptions for streaming services.

When applying for a financial product such as a payday loan or starting a gym membership, your debit card will be tokenised during the application process. This may involve the company taking a small sum like 1p or £1 out of the account and then putting the money back in. This tokenises the card and validates it for future repayments and instalments to come out of.

As a customer, you simply confirm the repayment date with the provider each month e.g the last working day or the 25th – and the continuous payment authority will automatically collect recurring payments as scheduled.

When is Continuous Payment Authority Commonly Used?

• Subscriptions: Streaming services (e.g., Netflix), software, and meal kits.
• Memberships: Gyms, clubs, and monthly subscription boxes.
• Utility & Phone Bills: Variable monthly bills drawn by service providers.
• Insurance & Trials: Car breakdown cover and auto-renewals following a free trial period.
• Loan Repayments: Often utilised for short-term or payday loans. 

What Are The Benefits of Continuous Payment Authority?

Continuous payment authority is convenient for both companies and the customers they collect from. For companies, it offers a simple way to do recurring payments when a set amount is due each month on a specific scheduled repayment date. Once set up, it can effortlessly collect repayments from a debit card, credit card or bank account each month.

For customers it is also convenient because whether it is repaying a payday loan or paying a monthly Netflix subscription, once it is set up, the payment will automatically be taken from their debit account and there is no need to call up the company, make a manual payment or go to a branch or post office – it is collected automatically. 

How is Continuous Payment Authority Used To Repay Payday Loans?

The continuous payment authority is set up during the application process and your debit card is verified. With payday loans, this can only be repaid from a debit card, not a credit card.

You schedule a repayment date with the lender such as 15th, 25th or last working day of the month and this repayment will be collected using continuous payment authority for the exact agreed amount.

You do not have to confirm anything else with the lender, call up to make a repayment or make a manual bank transfer, since the process is entirely automatic.

The continuous payment authority order continues until the loan is paid off in full.

What Are The Downsides of Continuous Payment Authority?

The downsides of continuous payment authority for some customers is that they have a recurring payment locked in on a set date each month, whereby the lender can attempt to take the agreed repayment amount out of their account. 

For those juggling their finances or waiting for some more income to come through, having a recurring payment set up can be stressful, especially when they may not have remembered it or were trying to keep money aside for another pressing bill or matter.

Can I Stop a Continuous Payment Authority From Taking Money Out of My Account?

Yes, legally you are allowed to ask the lender to cancel your continuous payment authority from taking any upcoming or further payments. This is as simple as calling them up or emailing them to stop the continuous payment authority order. (Source: Citizen’s Advice Bureau)

However, as per the loan agreement that you would have signed, your loan repayments will still be outstanding and this does not exit you from the arrangement. 

What Happens if I Cancel Continuous Payment Authority For My Payday Loan?

If you decide to cancel the continuous payment authority for your upcoming payday loan repayments, the lender can legally stop these, but your loan repayment for that month and ongoing will still be due.

Failing to keep up with repayments for a payday loan can lead to an added penalty of up to £15 for each missed repayment, a negative impact to your credit score and added interest for each day that the loan is left overdue.

So What Should I Do If I Want To Stop Continuous Payment Authority?

Consider the reason why you want to stop the continuous payment authority. If it is to help manage your cash flow and because you are experiencing some short-term payment difficulties, the best thing to do is always speak to the lender and ask for some options. 

Lenders are very used to receiving these kinds of phone calls and will often help by extending the terms of your loan, although interest may be charged, or offering repayment plans to help make the loan repayments more affordable.