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BreadcrumbResourcesDirect Debit: A Beginner's Guide

Direct Debit for membership organizations

Direct Debit helps membership organizations to improve member retention and to reduce admin, and is suitable for organizations of all sizes.

Direct Debit - also known as ACH Debit or bank debit - helps membership organizations of all sizes, from local sports clubs to national organizations, collect fees. This provides three main benefits:

  1. Improve member retention by reducing payment failures.

  2. Automatically increase fees when you need to.

  3. Reduce membership and payment admin.

Benefit 1 - Improve member retention

Many membership organizations take recurring payments by credit and debit cards. Around 5-10% of these payments fail each month due to cards expiring or being cancelled.

This is a bad experience for your members. It creates unnecessary work for them having to update their details and, if they forget, may result in their membership lapsing. In contrast, Direct Debit payments use a customer’s bank details, which rarely expire or change.

Rock Choir used to take payments by card but suffered from high failure rates. Director Dave Lusher “seemed to spend all [his] time chasing people to update their card details”.

Since switching to Direct Debit provided by GoCardless, they’ve cut their failure rate by 80%, freeing Dave to spend that time on what matters to his members.

Benefit 2 - Increase fees when you need to

Membership organizations may, from time to time, need to increase their fees. 

If you take payment by standing order, this can be difficult, as you’ll need to cancel existing standing orders and ask your members to set up new ones.

Direct Debit, on the other hand, lets you change the amount you collect without needing any further action from your customer.

Benefit 3 - Remove unnecessary admin

Taking payments by check, cash, and standing order can be a huge administrative burden, particularly as there is no automated reporting system.

GoCardless - as a specialist Direct Debit provider - gives you an online dashboard which displays the real-time status of your payments, so you can see who has and hasn’t paid at any time.

Before switching to Direct Debit with GoCardless, Spencer Hockey Club found managing their 400 members challenging. Director Mark McDermott explains: 

“We used to let members pay by check or bank transfer. It made collecting and tracking membership fees difficult and time consuming, and the club suffered from late and missing payments. Now 80% of our members pay by Direct Debit, and the black hole in our finances has disappeared.”

How to get started with Direct Debit

To start taking payments by Direct Debit, you can use a bank, bureau, or GoCardless. If you would like to find out more about any of these options, you may find our 60 second guide to Direct Debit providers helpful.

GoCardless is a specialist Direct Debit payments provider. It lets you automate your whole payment process and manage everything online. It offers:

  • Quick and easy sign up - You can sign up instantly and for free.

  • Easy and efficient management - You can collect recurring and one-off payments automatically, and we manage the hard parts for you. We are also integrated with many of the most popular accounting packages to enable easy invoicing and payment reconciliation.

  • Simple, low pricing - Take a look at our competitive pricing options.

  • Hassle-free member sign up - Using Direct Debit with GoCardless, potential members can instantly set up their payments to you online, rather than having to deal with mail.

For more information on Direct Debit, read our overview of how Direct Debit works. You can also learn more about how GoCardless allows you to save time and money when collecting payments via Direct Debit.

GoCardless makes it easy to collect recurring payments

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GoCardless (company registration number 07495895) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017, registration number 597190, for the provision of payment services.