What is CPA and how does it work? 💳

At Abound, we use a Continuous Payment Authority (CPA) to collect your monthly repayments. While it works similarly to a Direct Debit, it uses your debit card instead of your bank account number and sort code.

How it works

When you sign your loan agreement, you give us permission to withdraw your agreed monthly repayment from your nominated debit card.

• Automatic: You don’t need to do anything each month; the payment is taken automatically on your chosen date.

• Flexible: If you get a new bank card, you can update your details in your Abound dashboard instantly, ensuring you never miss a payment.

Why we use CPA instead of Direct Debit

We chose CPA because it offers several advantages for both you and your financial health:

• Immediate Confirmation: Unlike Direct Debits, which can take days to clear, CPA payments are processed instantly. This means we can update your balance and confirm your payment success in real-time.

• Avoiding Bank Fees: If a Direct Debit fails due to insufficient funds, many banks charge a "Returned Item Fee" (often £10–£25). With CPA, if the payment fails, your bank simply declines the transaction, usually without charging you a penalty fee.

• Accuracy: CPA is tied to your card, which is often more "current" than a bank account link, making it easier to manage if you switch banks but keep a similar card type.

What happens if a payment fails?

If there aren't enough funds in your account on your payment date, the CPA will fail.

1. We will notify you immediately via email or SMS.

2. We will typically try to collect the payment again a few days later to help you stay on track.

3. You can also log in to your dashboard at any time to make a manual payment using a different card if needed.

Can I cancel a CPA?

Yes, you have the right to cancel a CPA at any time by contacting us or your bank. However, please remember that your loan agreement still requires you to make your repayments on time. If you cancel your CPA, you will need to set up an alternative way to pay to avoid late fees and a negative impact on your credit score.