Taking an illustrative £40 monthly fee, a standard UK card payment through Stripe costs the madrasa 80p and a Bacs Direct Debit costs 40p. Those figures come from Stripe's published UK prices as of October 2026. Direct Debit is half the price on this fee, and the gap widens as the fee grows, faster still once Direct Debit reaches its £4.00 cap at £400.
Below, the same numbers are run on one fee, on a full year for a whole madrasa, and on the costs that a price list hides: disputes, refunds and waiting for money to clear.
What Stripe charges in the UK
Stripe lists its standard prices on its UK pricing page. These rates matter to a madrasa that collects fees in pounds.
- For cards, Stripe charges 1.5% + 20p for standard UK cards and 2.8% + 20p for premium UK cards.
- Cards issued abroad cost more: 2.5% + 20p for cards from the European Economic Area and 3.15% + 20p for other international cards, plus 2% if currency conversion is required.
- For Bacs Direct Debit the fee is 1%, with a minimum fee of 20p and a cap of £4.00.
Notice the 20p. On a card it is added to each payment. On Direct Debit it is only a floor.
One £40 fee, five ways to pay
The table applies those rates to an illustrative £40 fee paid once. It shows Stripe's fee alone.
| How the parent pays | Stripe fee | The madrasa receives |
|---|---|---|
| Bacs Direct Debit | 40p | £39.60 |
| Standard UK card | 80p | £39.20 |
| European Economic Area card | £1.20 | £38.80 |
| Premium UK card | £1.32 | £38.68 |
| International card, no conversion | £1.46 | £38.54 |
Against a premium card, Direct Debit costs less than a third as much. If the madrasa takes cards, it pays whatever mix of these rates its parents bring.
Families paying from abroad
If an illustrative £40 payment on an international card also needs currency conversion, the fee is 5.15% + 20p, or £2.26. That is more than five times the Direct Debit fee on the same payment.
When the 20p minimum and the £4 cap apply
A £40 fee sits well clear of the Direct Debit minimum and its cap. Fees at either end behave differently.
Small one-off payments
On an illustrative £10 payment, 1% would be 10p, so the 20p minimum applies and the Direct Debit costs 20p. The same illustrative £10 paid by a standard UK card costs 35p. Direct Debit still wins, but setting one up for a single small payment is a lot of effort for 15p.
Termly fees
On an illustrative termly fee of £450, the Direct Debit stops at the £4.00 cap, while a standard UK card payment costs £6.95. The cap starts at £400, because 1% of £400 is exactly £4.00. Above that, every Direct Debit costs the same £4.00 however large the fee.
Sixty students over a year
Take an illustrative madrasa with 60 students, each paying £40 a month for 12 months. That is 720 payments a year.
| If every family paid by | Stripe fees a month | Stripe fees a year |
|---|---|---|
| Bacs Direct Debit | £24.00 | £288.00 |
| Standard UK card | £48.00 | £576.00 |
| Premium UK card | £79.20 | £950.40 |
In this illustrative case, moving every family from a standard card to Direct Debit saves £288 a year in Stripe fees. Your own figure depends on how many families you can move, and on what cards the others use.
A mixed picture is more likely. In an illustrative split of 40 families on Direct Debit and 20 on standard UK cards, Stripe fees come to £32.00 a month, or £384.00 a year. Each family that moves from a standard card to Direct Debit saves 40p a month on a £40 fee, which is £4.80 over a year.
Small sums, but they come out of the same pot that pays teachers and heats the building. Over three years, the standard card gap alone comes to £864 in this illustrative example.
What a disputed payment costs
A dispute is when a parent asks their bank or card issuer to reverse a payment. The two methods handle it very differently.
Stripe charges a dispute received fee of £20.00 for each card dispute, and in rare cases network fees also apply. Responding to a card dispute manually costs a further £20.00, which you get back if you win.
For Bacs Direct Debit, the fee is £5.00 for each disputed payment. That is cheaper, with two catches. There is no set time limit for a parent to dispute a Bacs Direct Debit payment. You cannot submit evidence or counter a Bacs Direct Debit dispute, and the bank's decision is final.
When a parent's bank raises a Bacs dispute, Stripe deducts the disputed amount and the dispute fee from the madrasa's Stripe balance. On an illustrative £40 fee, a lost Bacs dispute costs the madrasa the £40 plus the £5.00 fee. In that illustrative case, the £5.00 fee alone cancels out the 40p saving on 13 Direct Debit payments. Clear notice before each collection makes an unrecognised debit less likely.
Waiting for a Direct Debit to clear
It takes 4 business days to confirm the success or failure of a Bacs Direct Debit payment when a mandate is already in place, and 7 business days when a new mandate has to be collected.
This has a practical cost. Until those business days pass, a family who has paid can still show as unpaid. Wait until payments are confirmed before you chase anyone, or you will spend the week apologising.
Refunds work differently
Refunds for Bacs Direct Debit payments must be submitted within 180 days of the original payment.
There is a trap here. Refunds are not part of the Bacs Direct Debit scheme, and a parent can still raise a dispute after a refund, so the madrasa can lose both amounts. Before refunding, tell the parent you are doing it, so they do not also go to their bank. Stripe's Bacs Direct Debit documentation sets out the full refund and dispute rules.
What fee software adds
Ask any fee system what it charges on top of Stripe, as a percentage, and whether that charge applies to cash.
Hidayah adds a 0.3% platform fee on top of Stripe's fee, on both card and Bacs Direct Debit payments. On an illustrative £40 fee that is 12p, whichever way the parent pays. Across the illustrative 720 payments a year above, that adds £86.40 to either row of the table. Cash and bank transfers recorded in Hidayah carry no Hidayah fee. Monthly plan prices are on the madrasa software pricing page.
Which method to offer parents
For a fee that repeats every month, Direct Debit is cheaper at every payment size in this post. Its weak spot is disputes, which cost less but cannot be argued. Ask families to move to it for regular fees.
Keep cards for the payments where a mandate makes no sense: a one-off trip, a late joiner's first month, a family that will not give bank details. To take a Direct Debit you need a Bacs Direct Debit Instruction, also called a mandate, from the parent. A parent paying once may not want to set one up.
Hidayah lets parents pay madrasa fees by card or Direct Debit from the same portal, so you can offer both without running two systems.
A first step for this term
- Count last term's card payments and multiply by the gap on your usual fee. On £40 that gap is 40p for a standard card.
- Write a short note to parents explaining Direct Debit, the collection date and the amount.
- Tell them what the debit will look like. By default, a parent's bank statement shows Stripe as the service user, along with the mandate reference.
- Run your arrears check once payments are confirmed, not the day after collection.
Questions madrasa admins ask about payment fees
Is Direct Debit always cheaper than a card payment?
On Stripe's standard UK prices, yes, at every amount. The Bacs Direct Debit fee is 1% with a 20p minimum, and the cheapest card rate is 1.5% plus a fixed 20p, so the card fee is always the higher of the two.
Does the 20p work the same way for cards and Direct Debit?
No. On a card payment the 20p is added to every payment on top of the percentage. On Direct Debit the 20p is a minimum, so it only matters when 1% of the payment comes to less than 20p, which means payments under £20.
How much does a chargeback cost?
A card dispute carries a £20.00 fee (in rare cases network fees also apply), and responding to it manually adds another £20.00 that comes back if you win. A Bacs Direct Debit dispute carries a £5.00 fee, but it cannot be countered and the decision is final.
How long before I know a Direct Debit has been paid?
With a mandate already in place it takes 4 business days to confirm success or failure. When a new mandate has to be collected, it takes 7 business days.
Does Hidayah charge a fee on cash payments?
No. Hidayah's 0.3% platform fee applies to card and Bacs Direct Debit payments only. Cash and bank transfers recorded in Hidayah carry no Hidayah fee.
Can these Stripe prices change?
Yes. The figures here are Stripe's standard UK prices as of October 2026. Check Stripe's UK pricing page before you plan a budget around them.
Sources
- Stripe: Pricing and fees (United Kingdom), checked 9 October 2026
- Stripe: Local payment methods pricing (United Kingdom), checked 9 October 2026
- Stripe: Bacs Direct Debit payments, checked 9 October 2026