Direct Debit for Membership Organisations: An Introduction

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Running a membership organisation comes with a raft of responsibilities, not least of which is collecting fees from numerous individuals.

Whether you manage a database of thousands or dozens, processing these regular fees might be causing a few headaches.

Maybe you rely on accepting membership payments via a combination of cash, cheques and card payments: a recipe for admin hassle and inconvenience.

Maybe you’re fed up with the monotony of chasing members for new card details when theirs have expired, asking again for that missing fiver because they didn’t have the right change last week, or wondering if the cheque they’ve posted will bounce again.

It’s a tedious chore that’s eating into your time, affecting your cash flow, compromising your service and damaging member loyalty.

There’s a simple solution for all membership organisations, big and small: Direct Debit.

Read on to learn how it can help you to deliver an efficient, digitally-enhanced experience for everyone.

What is Direct Debit?

direct debit for membershipsDirect Debit is a straightforward, reliable way to electronically transfer funds between UK banks.

Operated by Bacs, these payments are fully automated to simplify moving money from one account to another on a regular basis. In 2017, Bacs processed 4.2 billion Direct Debit transactions worth £1.3 trillion and its popularity continues to increase.

Compared to other regular payment methods, its efficiency and security is unrivalled. With every transaction covered by the Direct Debit Guarantee, it offers the reassurance of an automatic refund from the banks if an error is ever made.

It will bring transformational benefits to you, your members and your bottom line.

Direct Debit vs. the Alternatives

When it comes to collecting membership payments, it’s easy to accept the status quo and resign yourself to it being a boring but necessary part of the role.

It doesn’t have to be this way.

Whatever methods you’re relying on now, they all have limitations that Direct Debit can lift.

Cash has obvious pros and cons: if you see your members face-to-face, it’s convenient for them to pay in person with notes and coins. You immediately know that fees have been paid, although you need to ensure you have an accurate and accessible way of recording this. Handling large amounts of cash also poses a security and cash flow risk with zero recompense if money goes astray or is stolen.

Cheques are rapidly becoming outdated. Accepting them creates unnecessary admin work, along with delays in getting paid while they clear and uncertainty if they ever will.

Debit and credit cards are a cash-free answer which offer the benefits of instant payment for membership organisations. But the admin job of asking for new card details when the old one expires is a hassle you can live without.

And what about your members? You can easily provide them with a payment option that doesn’t involve remembering when the payment is due and then having to log on or make a call to complete it.

You might be using Standing Orders to accept recurring payments and think they do the job well.

But it’s a restrictive system easily confused with Direct Debit that actually has some important differences:

  • A Standing Order is an instruction from a customer to their bank to pay a fixed amount to you on a regular basis. Any changes to the amount, frequency or date of collection must be arranged by your customer with their bank.
  • A Direct Debit is an instruction from a customer to their bank that authorises you to collect money from their account. With a Direct Debit, when the payment amount, frequency or payment date changes, you can collect the new amount on the date of your choosing. Your member doesn’t need to authorise this, they simply need to be informed in advance.

This means that with Direct Debit, the ball is in your court as you can adapt the payment to suit your needs.

With Standing Orders, the member is in charge. They can cancel or change a Standing Order without informing you: you’ll only realise this when the payment doesn’t materialise. This could take a month or longer, depending on the payment frequency, jeopardising cash flow and causing unnecessary uncertainty.

When a Direct Debit is cancelled, you’ll be notified immediately so you can take prompt, professional action and get the money in the bank swiftly.

Introducing Direct Debit for Memberships

membership paymentsDirect Debit makes it easy for people to pay membership fees for your club, society, guild or organisation.

As a consumer, you’re probably among the 80% of UK adults to have at least one Direct Debit. Reassured that your payment is being made automatically, there’s no need to give your energy bill or car insurance instalments a second thought.

The ease, peace of mind and convenience you enjoy personally can be replicated within your membership organisation.

Think your set-up is too small? Think again. Direct Debit is open to all.

Traditionally, only large corporations with substantial turnover could get a piece of the Direct Debit action. Prohibitively expensive and riddled with challenging obstacles, its door was firmly closed to organisations like yours.

Now you and your members are welcomed with open arms into the Direct Debit family thanks to dedicated bureaux, such as FastPay, who can manage and facilitate the process for you.

For a small set-up fee and low transaction charges, they’ll take away the hassle of managing multiple payment methods, replacing it with one straightforward way to collect fees.

Using a Managed Service allows you to easily sign up members to pay fees by Direct Debit, handing over the day-to-day management to your bureau. You’ll receive regular reports about your account’s activity, highlighting any non-payments quickly so you can swiftly resolve any issues.

All your members need to do is complete a Direct Debit Instruction, either online, over the phone or in person on a paper mandate. Your bureau can provide fully-branded, and therefore personalised, templates and scripts to guide you through the set-up process.

Details collected, you can relax knowing that your bureau is taking care of everything.

Fees vary depending on the bureau you choose, the service you use and the number of collections you make. As a guide, FastPay offers a transparent and competitive pricing structure with prices per Direct Debit processed starting at just 10p for its Managed Service customers.

All bureaux are approved by Bacs to carry out collections on your behalf. Each one has gone through a careful vetting process before being authorised and are listed online. In addition, the efficiency and security of Direct Debit is monitored and protected by your own bank or building society.

Fully automated, your new Direct Debit system can be managed online and integrated with specialist accounting apps such as Xero. Fully streamlined, you’ll have a comprehensive overview and game-changing control over your membership payments.

The unrivalled security, convenience and reliability it brings to you and your members is quick and easy to introduce. Make it your only accepted payment method and your accounting system will be transformed for ever.

How Direct Debit Benefits Member Organisations

membership organisations

At the heart of every club, society and membership-based group is the never-ending job of attracting, engaging with and retaining those vital members.

Without them, your role is redundant. With them on side, your enterprise will go from strength to strength.

Direct Debit for memberships delivers several specific benefits that can help here:

Increases Member Retention

Keeping hold of your members involves a comprehensive strategy aimed at meeting demand and exceeding expectations: inspiring events, expert advice, helpful customer service and, of course, an efficient payment system.

If you accept payment by debit and/or credit cards for membership fees, you run the risk of a proportion of these transactions failing. This is because cards expire and are cancelled.

At best, you have to deal with an increased admin load and dissatisfied members while those details are updated. At worst, you’re left with a list of lapsed memberships simply due to an unreliable payment method. Persuading them to renew becomes yet another task on your to-do list.

Offer Direct Debit as a membership payments option and because it uses bank account numbers which rarely change, those details remain current for longer.

With a smooth payment system comes smooth service: members will suffer no interruptions, just the knowledge that their fees have been paid securely, automatically and easily.

Encourages Loyalty

customer loyaltyLoyalty is at the heart of any thriving club, society or guild. If you’re offering a mediocre experience, members will simply look elsewhere.

Your job continually involves fostering this precious loyalty by meeting their expectations, creating value and building trust. Loyalty that translates into a healthy membership database and, hopefully, a healthy bank balance.

Alongside the tried and tested ways to achieve this, such as effective communication, excellent customer service and irresistible incentives, making fee payment as easy as possible can also help here.

Direct Debit encourages loyalty by offering a straightforward, hassle-free system that meets the digital demands of an increasingly tech-aware population. If you can choose a payment option that simply involves your members completing one form once, why would you consider anything else?

Once they’ve filled in their Direct Debit Instruction, it’s over to your bureau to do all the behind-the-scenes work. Their payments are taken care of, reducing their financial admin load and saving them valuable time.

Members can all choose their payment date, allowing them to efficiently manage their cash flow and remain in full control of their finances. Flexibility that they’ll thank you for via loyalty.

If they can pay your membership fees via a straightforward, secure and tech-friendly method, they’ll think of your club as a professional organisation that wants to make their lives easier.

Secures Cash flow

cash flow projectionsUnreliable income is the bane of any business. Big or small, local or national, your membership organisation relies on a steady stream of fees to keep it ticking over.

If your cash flow is compromised, so is your ability to forward plan and build on your existing success.

Direct Debit for memberships comes to the rescue here. You’ll receive the expected amount on the expected day, predictable payments that mean your account balance looks exactly how you envisaged.

This reassurance allows you to forecast accurately and realistically plan your spending. Whether you’re looking for new premises, considering a website revamp or planning a major event, Direct Debit will give you the cash flow confidence to go ahead and make things happen.

And when it comes to increasing fees, you can easily do this by simply giving advance notice. Unlike Standing Orders, there’s no need to cancel the existing agreement and set up a new one. Alter the amount, tell everyone what’s happening and the system continues effortlessly for both you and your members.

Reduces Admin

With Direct Debit, you can wave goodbye to the admin burden of processing payments from multiple people using multiple methods. No more carrying bags of cash to the bank, no more keeping your fingers crossed that cheques won’t bounce, no more time-consuming phone ring-rounds collecting card payments.

You can also turn your back on the awkward, repetitive conversations involved in chasing late payments.

Instead, you’ll be accessing an online dashboard with real-time information about who’s paid you and when. Every detail you need will be at your fingertips, both on your desktop and mobile device.

If there are any issues, such as bounces or cancellations, you’ll be alerted via regular reports emailed direct from your bureau. You’ll be equipped with all the information you need to resolve the problem quickly and professionally.

Time previously spent on monotonous financial jobs will be freed up so you can focus on offering your members exceptional service and attracting even more people to join them.

From sports clubs to tradesmen’s guilds and professional institutes to hobby societies, Direct Debit is the most secure, reliable payment option for the digital world.

Offering peace of mind and convenience for you and your members, harnessing its power could revolutionise your organisation.

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