AUDDIS, bureau, Direct Debit Guarantee, members, membership, Paperless Direct Debit
AUDDIS, Bureau Service, Charity, Direct Debit, Membership, Paperless Direct Debit (PDD), Reports, Security, Training
04, MAY 2018

Knowing your members is the key to maintaining and growing your member-base – knowing their likes and dislikes; what drives them to want to be a part of your organisation, and what’s important to them.

People like paying by Direct Debit! According to data collected over a number of surveys, only between 14% and 18% of people would prefer not to use Direct Debit as a form of payment for membership fees. Around double that, at 32%, are people that would prefer Direct Debit to any other payment form.  Everyone else surveyed was happy to pay by Direct Debit too.

Why are Direct Debits the preferred choice?
A large factor as to why Direct Debit enjoys such a good reputation is because of the protection given to members by the Direct Debit Guarantee. If any payment is collected in error, the Direct Debit Guarantee means the member can reclaim the money. This guarantee protects their finances, allowing them to set Direct Debits up and not think about them again. This means higher member retention for your organisation. Once the member has committed to the Direct Debit they are much less likely to cancel. From the members perspective, money is automatically taken from their account and requires no effort on their part.

Security and convenience are two increasingly important deciding factors for any member. People want to do less and get more. Offering a secure online signup and payment system like paperless direct debit gives your new and ongoing members both.  People are used to paying online these days. The convenience of signing up online at any time of the day or night means they are more likely to go ahead. Another good tool for ensuring member growth and retention is the level at which you set your membership fee. By setting different fee levels for inclusivity you allow a wider range of people to be members and choose their level of commitment to your organisation. You can manage this very easily through paperless direct debit.

What about how Direct Debits affect us?
Having happier members isn’t the only reason you should be adding Direct Debits to your arsenal. There are numerous benefits for your organisation. For starters direct debit transactions are cheaper than both cheques and credit cards to process. Once the collection process is complete you receive reports that show what has failed, making admin easier. With Direct Debits you can change the level of the membership e.g. increase the membership amount due, etc. and just apply the change to the collections (as long as the members are informed). This is far easier than standing orders where the member is in control and you are reliant on your member to remember to change the amount. All of this reduces staff hours spent on getting payments through and following up on any issues.

So what do we need to do?
Setting up direct debits can seem a bit daunting, but the process isn’t complicated once you get stuck in. The first step is to apply for a Service User Number (SUN) with your bank. A SUN is the unique number your bank gives you if you’re approved as a direct debit submitter. Bacs uses this number to identify who is collecting payment by direct debit, and to create a record of the transaction. If your organisation is approved for a SUN then you can choose to be either Direct or Indirect Submitters – submitting through software directly to Bacs, or using a Bureau service to submit to Bacs on your behalf.

Going down the software route involves purchasing and maintaining software, training/hiring staff to create and process the collections, and managing the reports and dealing with any issues such as failed collections or problems on the back end of the process. There are many different software options out there now, and there are training courses and direct debit consultants available to help with the process.

Choosing to go with a Bureau can mean a lot less work and upfront cost for the organisation. Using a company whose sole purpose is to process direct debits to Bacs eliminates the worry of mistakes. It also removes the transition period of either training existing staff or hiring new staff. As a bureau does the processing for you it also takes away the need to purchase software that can often be quite costly.

Once you’ve got your SUN and chosen what type of submitter you would like to be you need to ensure that you are setup to process paperless direct debits and are AUDDIS enabled. This simply means that you should be able to complete the direct debit process online rather than with physical paper. This step is the most important part for your membership base, as the convenience and security of the paperless direct debit is what members love so much.

As reflected in the earlier statistics, switching your members to paying by Direct Debit shouldn’t be difficult. You will also find that having new members sign up online with Direct Debit will have only positive repercussions. You can give existing and/or new members a little incentive to change their payment method. A tried and tested way to go is to offer a Direct Debit discount. Even if it is a small discount only offered for a short period of their membership, its proven effective. Once the charges change back to the full fee your members will be used to the benefits of automatic payments with total peace of mind.

All in all, today’s members biggest concerns are convenience and security, and Direct Debit offers both. For any professional membership organisation the takeaway here is clear – Direct Debit is increasingly popular, so you really can’t afford not to include it among your payment options.

Have an interest in Direct Debits and Credits?
We’d be more than happy to help. We’re a multi-faceted company that supplies Direct Debit and Credit trainingconsultancy and Bureau services. So whether you need that extra help to process your transactions perfectly yourself, or you’re looking for someone else to do the job for you, we would love to hear from you. Give us a call on 0845 658 6488 or email us at info@cleardirectdebit.co.uk