There are two principal drivers that currently make the use of direct debits a much more viable alternative to card based payments: cost and administration time.
The first area of consideration is cost, which is quite possibly most important point that many businesses will factor into this decision. Businesses that decide they would like to collect money from customers using a Direct Debit are generally charged at a fixed rate per transaction, irrespective of the value of that transaction. Even for lower value transactions, the fee paid by the business is usually far lower than what they would be required to pay through using cards based payments.
The second example where a Direct Debit demonstrates a distinct advantage over the use of Credit Cards, is where the businesses business model involves the use of repeat collections, such as with subscription agreements or financial commitments. Cards of all types have relatively short expiration dates, which mean that the business will have to continually update their customer’s details. This is much less of an issue with a Direct Debits as many people are unlikely to change their bank account as frequently as their bank card. As such, a Direct Debits requires far less administration and have a higher probability that any collection request will be accepted.