How to accept recurring payments in the UK

Key takeaways

• Recurring payments save time and smooth cash flow. Automating collections keeps your revenue predictable and removes the hassle of chasing invoices.

• You have a number of options. From Direct Debit to Open Banking, the right setup depends on your billing model, customer base, and growth plans.

• Airwallex makes it easy to scale. With multi-currency support, fast settlements, and built-in controls, you can manage recurring payments globally from one platform.

Collecting payments shouldn’t take more time than running your business. But, for many UK companies, manual invoicing and follow-ups make that feel like a reality. Cards expire, transfers take time, and spreadsheets leave room for error.

If you want to automate payment collection, recurring payments let you charge customers on a regular schedule once they’ve given consent. They’re useful for businesses with repeat billing cycles or subscription models.

In this guide, we go through what recurring payments are, why they matter for UK businesses, and how to set them up without hassle. 

What are recurring payments?

Recurring payments are payments you collect automatically at a regular interval. You get permission once, then your system takes care of the rest. They’re often used for:

• SaaS subscriptions

• Gyms and fitness studios

• Utilities and telecoms

• Digital media and streaming

• Managed services and retainers

• Clubs and membership bodies

How do you set up recurring payments in the UK?

Setting up recurring payments involves choosing a provider, creating payment plans, and connecting them to how you bill customers. Here’s exactly how to move from manual collection to automated, predictable revenue.

1. Define what you’ll charge for and how often

Outline your billing structure before you start.

• Identify what you’re charging for, such as subscriptions, retainers, or service packages.

• Decide whether prices are fixed, tiered, or usage based.

• Set the billing frequency: weekly, monthly, quarterly, or annually.

• Note whether customers are domestic or international, as that will affect your payment methods.

These decisions shape how you configure your provider’s system later.

2. Choose your payment methods

Select one or more payment methods based on your customer base and the nature of your billing:

• Direct Debit: reliable for UK-based customers and predictable payments.

• Card payments: best for online or international transactions.

• Open Banking: fast and secure bank-to-bank transfers with no card data involved.

• Standing orders: simple but less flexible, since customers must manage them manually.

Many businesses use a combination to balance coverage, speed, and cost.

3. Register with a regulated payment provider

You’ll need an account with a provider that supports recurring payments.

• Choose one authorised by the Financial Conduct Authority (FCA). This ensures compliance with UK financial standards.

• Check which payment methods and currencies they support, and how long settlements take.

• Complete onboarding by providing your business information and verification documents.

Once approved, you’ll get access to a dashboard for managing recurring plans and monitoring transactions.

4. Create your recurring payment plans

In your provider’s dashboard:

• Create a new plan or product.

• Enter the amount, billing frequency, and description.

• Specify whether the price is fixed or variable.

• Select the payment methods to accept.

• Save the plan.

This tells it how much to charge, how often, and through which channels.

5. Connect your tools so customers can start paying

Next, let customers enter their details and authorise recurring payments. Depending on your setup, you can:

Add a checkout page to your website: Create a hosted checkout or payment button from your provider’s dashboard, then add the code to your site’s sign-up or pricing page.

Send payment links or invoices: Generate a secure payment link with the plan name, amount, and billing frequency. Share it by email or message. Customers enter their details once and future payments run automatically.

Use APIs for custom set ups: If you have developer support, integrate the provider’s API to embed subscriptions directly into your platform or app.  

Your provider handles security and data protection through tokenisation, which replaces sensitive card or bank data with encrypted codes.

6. Obtain and record customer consent

Recurring payments need clear, recorded authorisation.

• For Direct Debit, collect a digital or paper mandate.

• For cards or Open Banking, display clear wording at checkout showing the payment amount, frequency, and cancellation terms.

Your provider will store the consent record automatically, but it’s best to keep your own copy too.

7. Configure your failed payment process

Sometimes payments fail. A card might expire or an account may have insufficient funds. You can automate what happens next.

• In your provider’s dashboard, turn on automatic retries (e.g. retry after 3 days, then again after 7).

• Set up email or text alerts to notify the customer of the issue.

• Include a secure link where they can update payment details themselves.

This reduces revenue loss and manual intervention.

8. Test your setup 

Before accepting live payments:

• Run test transactions for successful and failed payments, refunds, and cancellations.

• Check that receipts, invoices, and tax calculations are correct.

• Confirm that payments appear correctly in your provider dashboard and your business account.

Go live only once you’re satisfied that every step works as intended.

9. Reconcile payments and maintain records

Once payments are flowing, keep your financial records aligned.

• Connect your provider to your accounting software to automate reconciliation.

• Match each payout to its corresponding invoice or subscription ID.

• Review transaction reports regularly to track performance and resolve issues early.

Why do businesses choose Airwallex for recurring payments?

Once your recurring billing system’s in place, you still need the financial infrastructure to support it. Airwallex powers the payments behind your subscriptions, helping you collect, hold, and convert funds across currencies while keeping reconciliation fast and compliant. It connects directly to your billing or ERP systems, giving you full visibility over incoming payments and settlements in one place.

With multi-currency accounts, transparent pricing, and built-in financial controls, Airwallex simplifies how revenue moves through your business. You can collect payments globally, access funds quickly, and manage cash flow without relying on multiple banks or systems. As you expand into new markets or add new entities, Airwallex scales with you, keeping your recurring revenue running smoothly at every stage.

Read more: How Airwallex Business Accounts work in the UK and Europe, and why your funds are always safe

Why should you use recurring payments?

There’s some setup involved, but once that’s done, recurring payments make your revenue more predictable and your operations more efficient. Instead of chasing invoices each month, you can automate collections, reduce manual work, and give customers a smoother way to pay. Here’s why many UK businesses are making the switch:

1. Predictable cash flow. You know what lands and when. Your forecasts improve and you can invest with confidence. 

2. Higher customer retention. Friction is the enemy of retention. Automatic collection removes it, so customers stay longer.

3. Less admin and fewer missed payments. No more chasing. No more spreadsheet reminders. Your system retries when a payment fails and notifies you if action is needed.

4. Meet customer expectations. Customers expect quick sign up and automatic renewal. Recurring options match how people already pay for everyday services.

5. Support subscription models. If your pricing is monthly or usage based, recurring payments are the engine that keeps revenue moving.

What are the main ways to accept recurring payments in the UK?

Recurring payments come with some clear benefits, but there’s no single best method to collect them. The right choice depends on your product, customer base, and flexibility needs. Here’s how each option compares.

1. Direct Debit (via Bacs)

This is the UK’s trusted method for collecting payments directly from a customer’s bank account with their authorisation, known as a mandate.

Why it works

• Low cost for handling high volumes

• Accepted by every UK bank

• Fewer failed payments than card transactions

Things to consider

• The first mandate takes time to set up

• Funds take a few days to arrive

• Best suited to predictable, fixed payments such as subscriptions or retainers

2. Recurring card payments

Ideal for online subscriptions, memberships, or international customers. You securely store the customer’s card information or a token and collect payments on a set schedule.

Why it works

• Fast to set up and easy for customers to use

• Instant authorisation and faster access to funds

• Works globally with major card networks

Things to consider

• Cards expire or get replaced which can lead to failed payments

• You must stay compliant with PCI DSS data standards

• Fees are typically higher than bank based methods

3. Open Banking recurring payments

A newer method that uses secure account to account payments. Customers authenticate through their bank and agree to recurring payments that repeat automatically under their consent.

Why it works

• Instant bank transfers

• No card data to handle or store

• Lower risk of failed payments due to expired cards

Things to consider

• Bank coverage and features vary

• Works best with clear, fixed schedules

• Depends on your provider’s Open Banking setup

4. Standing orders

A straightforward option where the customer instructs their bank to send you payments on a regular schedule.

Why it works

• Simple to set up and very low cost

• Suitable for fixed and repeat payments

Things to consider

• The customer controls the payment instruction

• Any change requires customer action

• Limited visibility and automation features

What are the compliance and security requirements for recurring payments in the UK?

There are a few things to remember here. Getting compliance right protects your customers and keeps your business out of trouble. Here’s what you need to know.

FCA authorisation. If you provide payment services or hold customer funds, you have to either be regulated by the Financial Conduct Authority or partner with a provider that is. Most businesses choose the latter to save time and complexity.

Strong Customer Authentication (SCA). Under PSD2, recurring payments must follow UK SCA rules. A good provider will handle the right authorisation flows for you, including exemptions and on-session consent where needed.

PCI DSS compliance. If you accept or store card details, you have to meet PCI data security standards. The easiest route is to use a provider that tokenises card information so no sensitive data ever touches your systems.

GDPR and data protection. Only collect what you need, store it securely, and make it clear how customers can manage their consent. Transparency builds trust and keeps you compliant.

To sum it up, choose a provider that’s authorised in the UK, offers detailed audit trails, and gives you built-in controls for user access, approvals, and data retention. That way, security becomes part of your process, not an afterthought.

Simple payments with Airwallex

Recurring payments turn revenue from uncertain to reliable and give your customers a smoother experience.  

Airwallex helps you accept recurring payments across cards, bank debits, and account to account flows, with multi currency support, fast settlement, and the controls you need to scale.

FAQs 

1. How do recurring payments work in the UK?

Recurring payments let you charge customers automatically on a fixed schedule. Once a customer gives consent, payments are taken through Direct Debit, card, or Open Banking. Each transaction runs without manual input, giving you predictable revenue and fewer failed payments.

2. What’s the best way to accept recurring payments?

It depends on your billing model and customers. Direct Debit suits fixed UK subscriptions, cards work well for online and international customers, and Open Banking offers fast, low-cost account-to-account transfers. Many businesses use a mix for flexibility.

3. Are recurring payments regulated in the UK?

Yes. Providers must be authorised by the Financial Conduct Authority (FCA) and comply with UK payment rules such as Strong Customer Authentication (SCA), PCI DSS, and GDPR. Working with a regulated platform ensures these requirements are handled automatically.

4. How long do recurring payments take to clear?

Settlement times vary by method. Direct Debit usually takes three working days. Card and Open Banking payments often settle much faster, sometimes within minutes.

5. How can I reduce failed or missed payments?

Use a provider that supports automatic retries, tokenised payment details, and expiry alerts. Open Banking reduces card-related failures, while clear customer notifications help keep details up to date.

6. Can I collect recurring payments in multiple currencies?

Yes. With providers such as Airwallex, you can collect and hold funds in several currencies, then convert or settle them when it suits your business - ideal for UK companies serving global customers.