August 26, 2016

Automating Dues and Payments for Your Association

Automating Dues and Payments for Your Association

MemberSuite is pleased to bring you this valuable information from our partner, BluePay. BluePay offers fast, easy, and secure payment processing solutions integrated within the MemberSuite platform to fit every association’s needs.

Recurring billing is a favorite among many businesses in the for-profit world. With this setup, all revenues are automatically deducted from customers' bank accounts and credit cards without these companies having to manually collect any money.

It’s also possible to implement "recurring billing" in the nonprofit world. Yet instead of revenues, your association can collect dues and contributions without actively soliciting your members on a regular basis. The money comes in automatically every month, quarter or year.

The Benefits of Automated Payments for Associations

Automated payments offer several obvious advantages for the receiving party. Your association benefits from:

  • Greater predictability - you know (ahead of time) what money will come in and when.
  • Fewer missing or late payments - your users don't have to remember to mail checks. All deductions happen automatically.
  • Reduced costs - your organization doesn't have to invest as many resources chasing down payments or processing dues.
  • Increased contributions - the payments only stop when members deliberately opt out of recurring billing. Otherwise, the dues keep coming indefinitely.

However, your members might not be as enthusiastic about automated dues. Many people don't like the idea of subscription-based models — they prefer having greater control over their finances. Others might be reluctant to share banking details or other important information.

In fact, payers and payees are often at odds when it comes to recurring billing.

How do you overcome member resistance to automated dues?

Making Automated Dues Work for Your Members

There are several ways you can increase member enrollment in recurring billing, including:

  • Making it the default option. This is especially useful as you bring in new members.
  • Offering perks to those who enroll. For example, automated dues could be 5 percent chepaer than the normal payment option. You could also try free gifts, rewards, or other types of benefits.
  • Playing up the environmental benefits. Automated dues happen electronically, without requirng paper, stamps or trips to the post office.
  • Highlighting the time-saving benefits (for the user). No one likes sitting down to write checks. Make sure your members understand how much easier automated dues are.

Setting Up Automated Dues the Right Way

Although automated payments offer many important advantages, there are certain things you need to consider: For example, payment errors can and do happen. According to the Electronics Payments Association, the industry average is about 38 errors per 100,000 payments.

It's worth noting that this frequency is substantially smaller than what you'd expect from mailed checks or user-initiated online payments. This is because with automated payments, all transactions happen electronically, with zero human involvement.

However, you can reduce this error rate even more by encouraging members to set up alerts with their card issuers or banks. If monthly dues are $50, for example, the user would receive notification if the payment ever exceeds that amount.

You can also send electronic confirmations so that members can easily reconcile their records each billing cycle.

Another concern is how to handle expired credit cards. Fortunately, some card brands have mechanisms in place to alert participating organizations and companies whenever an expiration date is approaching.

Kristen Gramigna

Kristen Gramigna is the Chief Marketing Officer of BluePay, a MemberSuite Partner.

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