We wish to encourage as many members as possible to change to pay their subscription by Direct Debit instead of by Standing order or Cheque. This page provides more information about this change and about direct debits in general
Why are we doing this?
Direct Debits are safer and more reliable than standing orders, and although we don’t expect to have to raise subscriptions in the foreseeable future, if we do need to do so you won’t have to do anything, unlike a standing order where you have to ask your bank to make the change.
Who are GoCardless?
GoCardless is a “Direct Debit Provider”, a company which manages direct debits for other companies and organisations, such as The RAF Music Services Association. They manage the collection of payments for many well-known businesses and organisations, but also provide an economic solution for small businesses, charities and societies. They will collect subscriptions every year for us automatically and more reliably, reducing the amount of administrative work necessary.
What is a Direct Debit?
Direct Debit is the simplest, safest and most convenient way to make regular or recurring payments; that’s why it’s used for things like council tax and utility bills.
A Direct Debit is an instruction from you to your bank.
A Direct Debit authorises someone to collect payments from your account when they are due. You give this authorisation by completing a Direct Debit Mandate form – this can be a paper form or a web page that you complete online. Once authorised the organisation can automatically take payments from you (provided they comply with the scheme rules). It’s important that you understand these rules, in particular:–
- Advance notice – You must be told the amount and date of each payment in advance.
- Direct Debit Guarantee – You are entitle to an immediate refund for any payments that shouldn’t have been taken.
Standing order vs Direct Debit
You may already be paying your subscription by standing order, how is that different from a Direct Debit?
Both enable you to make regular payments, and it’s easy to confuse the two, but there are some important differences.
- A standing order is an instruction from you to your bank to make a regular payment.
- A Direct Debit authorises an organisation to collect the payment directly from your bank account whenever it is due.
A standing order is completely controlled by you; you specify the amount and when it should be paid. However if you (or the bank) make a mistake and the payment goes to the wrong person it can be difficult to get it back. Also, if we need to increase the subscription amount you either have to ask your bank to make the change, or cancel the standing order and make a new one.
A direct debit on the other hand enables the Association to change the amount automatically after informing you in good time of the change, you don’t have to do anything.
If you change your bank account, both standing orders and direct debit mandates are supposed to be transferred to your new account automatically, but sometimes this can go wrong. If your standing order isn’t paid we have no way of knowing except by noticing that we haven’t received your subscription. Then you have to contact your bank to find out what is wrong, and arrange a new standing order. With a direct debit we will be informed immediately that the payment has failed, there is no possibility of it having gone to the wrong account, and it is easy for you to set up a new mandate online.
Will this cost me or RAFMuSA money?
There is no additional cost to you for paying your subscription by direct debit as most personal bank accounts in the UK have no transaction fees. There is a small cost to the Association, GoCardless charge 0.75% + 15p per transaction, which amounts to 30p on a £20.00 subscription. To this they have to add 6p VAT. We feel this is worth paying for the greater reliability of Direct Debits and the reduction in administrative work it provides.
When I looked into this a few years ago the only direct debit providers I could find demanded a large standing charge every year as well as transaction fees, which made it uneconomic unless we took thousands of payments every year. GoCardless on the other hand provide a cheap service suitable for small businesses, charities and non-profit organisations like RAFMuSA, although they do cater for larger businesses as well.
Still have a question?
If you have any questions or concerns not answered above, you can go to FAQs for customers on the GoCardless website. Also don’t hesitate to contact me by email at firstname.lastname@example.org, or by phone (my number is in The Blue and the Gold).
— John Dablin, Treasurer and Membership Secretary