Card-on-file vs direct debit for recovery — what works?

For recovery on payment plans, you have two practical mechanisms in Australia: card-on-file via Stripe (or similar), or direct debit via the New Payments Platform / BECS. Both work; they're suited to different debtor profiles and different debt sizes.

Card-on-file (Stripe)

Pros:

  • Fast setup — debtor enters card details once via the portal.
  • Good failure-recovery — Stripe Smart Retries reattempt on bank-side declines.
  • PCI burden sits with Stripe, not with you.
  • Works for short-term plans (3-6 months) where card expiry is less of an issue.

Cons:

  • Card expiry kills longer plans unless you ask for re-auth.
  • Higher per-transaction cost.
  • Disputed-charge mechanism (chargebacks) can pull recovered funds back.

Direct debit (NPP / BECS)

Pros:

  • Lower per-transaction cost.
  • No expiry — works for long plans.
  • Bank-account number is more stable than card details.
  • Better suited to larger amounts.

Cons:

  • Onboarding friction — debtor needs BSB/account.
  • Reversal window — debtor can claim unauthorised debit retroactively.
  • Failure recovery (insufficient funds) is slower.

When to use which

  • Plans under 6 months, balance under $2k: card-on-file wins on simplicity.
  • Plans 6-24 months, balance $2k+: direct debit wins on durability.
  • High-risk debtors with disputed history: direct debit avoids chargeback risk.
  • First-time / unsure debtors: card-on-file lowers psychological commitment.

Adeva Plus default

We default to card-on-file via Stripe for the recovery itself (single payment or short-plan first-payment), with optional direct debit setup for longer plans. The portal lets debtors pick — most pick card.