Standing order vs. Direct Debit: Which payment method is right for your sports club?

Direct Debit and standing order are both used to make regular payments, but they have some important differences. Let’s dive into these two methods to figure out which suits your sports club best.

What are standing orders and Direct Debit?

Direct Debit and standing order are both automatic payment methods.

A standing order is an instruction your member gives to their bank to pay your club a fixed amount at regular pre-agreed, fixed intervals, whether this is weekly, monthly, quarterly, or yearly.

With Direct Debit, your member authorises you to collect money directly from their bank account whenever a payment is due. Direct Debit payments can vary in frequency and amount.

You control a Direct Debit. Members control a standing order.

A standing order is set up by your members. They choose the amount and frequency and can change or cancel it without notifying you.

On the other hand, your club has significant control over the payments you take by Direct Debit. You decide how much and how often you collect from members. You can vary the amount and frequency of collections without further authorisation from the member, and you are notified automatically by the Direct Debit system of any payment cancellations or failures.

Which payment method should you choose for your sports club?

Which is the right option for your club depends on two key things:

1. The size of your sports club

2. Fixed vs. variable payments

1. The size of your sports club

If your sports club has less than 25 members, standing order may be a good option for you. Standing orders can work well for smaller clubs with close relationships with their members.

However, if you have more than 25 members, Direct Debit is probably a better option for you. A membership of 25 or more can bring about increased admin demands, including time spent pursuing members for late or missed payments, as well as working through payment reconciliation.

With a standing order, you will always need to check your account when a payment is due to find out whether a payment has actually been set up or if a payment has failed. On the other hand, with Direct Debit you set up the payments, so you'll know that everything's in place. What's more, you'll be notified of any failures right away, so you'll always know when you have and haven’t been paid without needing to search through your accounts.

2. Fixed vs. variable payments

Both Direct Debit and standing orders work well for regular, fixed payments. However, what happens when you need to increase your membership fees? Standing orders are not ideal for variable payments where amounts or frequencies change. A standing order is only really useful for making a fixed, recurring payment. If you decide to increase your membership fee or change the frequency of the payment, a standing order requires the member to make those changes. If your member forgets or takes a few weeks to do this, it could result in unnecessary time spent chasing them to make the necessary updates.

One of the greatest benefits of Direct Debit is its flexibility. You are in control, so you can adjust the amount or frequency of payments whenever you need to, provided you give your members the required advance notice.

While both methods can be used for one-off payments, Direct Debit means you control the payment so you know that the payment has been set up and when you’ll receive it, unlike standing orders, where there is always the risk of a member forgetting to set up their standing order, setting it up on the wrong date, or not changing the amount when fees change.

Consider the size of your sports club, the level of trust with your customers, and the flexibility needed in payment amounts and frequencies when making a decision between standing order and Direct Debit.