August 26, 2016
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.
Automated payments offer several obvious advantages for the receiving party. Your association benefits from:
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?
There are several ways you can increase member enrollment in recurring billing, including:
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.