Swim England
Which payment method is right for your aquatics club?
27 February 2024Direct Debits and standing orders are both used to make regular payments but they have some important differences. Here, Rachel Byrne, from GoCardless, dives into these two methods to figure out which suits your aquatics club best.
Direct Debits and standing orders are automatic payment methods – but they both have significant differences.
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.
Your member will choose the amount and frequency and can change or cancel it without notifying you.
With a 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 but the club can vary the amount and frequency of collections without further authorisation from the member.
The club is also notified automatically by the Direct Debit system of any payment cancellations or failures.
So which payment method should you choose for your aquatics club? This depends on two key things:
- The size of your swim club
- Fixed versus variable payments
If your aquatics club has less than 25 members, standing orders may be a good option.
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.
A membership of 25 or more can bring about increased administration 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 club officials 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.
Think flexibility
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 – they are 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.
The club is 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.
This is unlike standing orders, where there is always the risk of a member forgetting to set it up, setting it up on the wrong date, or not changing the amount when fees change.
Consider the size of your swim 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.
To make your payment collection process more efficient, consider using GoCardless.
With GoCardless, you can easily accept Direct Debit payments, automate collection, reduce admin, and ensure timely payments, reducing your club’s debt.