Direct Debits for gyms guide

When it comes to membership payments the go-to payment method is Direct Debit for gyms and fitness clubs. This is your guide to Direct Debit management. Get everything you need to know about this recurring payment method.

In the UK, around 7.33 million people hold memberships to privately owned gyms (source: Leisure DB). That’s 10.9% of the population. Many of these memberships will be paid by Direct Debit.

For gyms and fitness businesses, Direct Debits offer an efficient, reliable way to collect payments from members. As a bank-to-bank payment, a Direct Debit gives you permission to collect a pre-determined fee from a member’s bank account.

Keen to know more about gym Direct Debit management? We’ve got you covered! In this guide to Direct Debits for gyms, you’ll find:

Let’s get stuck in!

Direct Debits explained

What is a Direct Debit? A Direct Debit is an instruction between a consumer and their bank/building society. This instruction authorises a business to collect a varying amount directly from the consumer’s account.

The consumer must receive advanced notice of the amounts and collection dates. Once a Direct Debit Mandate is in place, you can collect a payment from a member’s account on a recurring basis.

A Direct Debit is a bank-to-bank payment. And in the UK, this payment method is run by Bacs. In 2023, 65,949,000 Direct Debits were processed for gym and health club memberships in the UK.

The Direct Debit Guarantee protects your members. It gives them confidence and peace of mind when choosing this payment method. It provides 3 safeguards:

It’s worth noting that a member is still obliged to adhere to the terms of the gym contract they’ve signed. So, if they do make an indemnity claim or cancel a mandate, they may still need to cover an amount owed as per their contract.

Benefits of Direct Debits for gyms

As a gym operator, choosing to let members pay by Direct Debit can bring several benefits:

Reliable & predictable revenue

For many, this is the biggest benefit. Using Direct Debits to collect membership payments can help you maintain a steady, consistent cash flow. Reducing financial uncertainty.

This makes it easier to forecast future performance and set budgets for your business. So, you can better plan for future investments and expenses.

Plus, Direct Debits are a set and forget payment method. So, encouraging members to stick with you. No need to manually pay each month or pay for each visit separately. Increasing retention and member lifetime value.

Flexibility & control over collections

As a pull payment (rather than push), Direct Debits give you the flexibility to adjust the amount and timing of collections.

If you want to make a change, you’ll need to give members notice of the new amount, date, and frequency of payments. This notification should be given at least 10 days before the change and the collection.

So, you’re in control of collections and making changes, while members are protected.

Fewer payment failures & late payments

Compared to manual payments or card payments, Direct Debits can reduce the number of missed payments.

With recurring card payments, cards often expire after a relatively short period of time. Bank accounts tend to stay the same and many banks offer switching services that transfer Direct Debits to a new account.

Gym Direct Debits typically fail for two reasons – insufficient funds or a cancelled instruction. You should be able to set your gym management software up to automatically notify members when payments fail with details of what to do next.

Cost savings

Especially compared to credit card payments, Direct Debit fees are usually significantly lower. Plus, gym Direct Debits reduce the cost of handling cash and processing one-time payments.

Benefits of gym Direct Debits for members

Next, let’s look at the benefits of Direct Debits for gym members:

Convenient, hassle-free payments

Your members don’t need to remember due dates or manually make payments for their membership. With Direct Debits, payments are automatically taken. So, making sure members always have access to use their membership.

Members can focus on their fitness goals. No worrying about missed payments or having to update payment details regularly.

Budget-friendly, predictable costs

Especially where there’s a fixed-term contract, paying by Direct Debit can help spread the cost of a gym membership over time. And that means it’s more affordable.

Many gyms offer discounts or perks for members who pay via Direct Debit. So, members may enjoy premium benefits and long-term savings.

Plus, members can budget more effectively with fixed, regular payments.

Security & peace of mind

The Direct Debit Guarantee adds extra security for members. Members know that they’ll be notified in advance of any changes to payment amounts and schedules. And if an error occurs, they’re entitled to a full and immediate refund from their bank.

Plus, members are given the control to easily cancel the payment at any time by contacting their bank or even via their bank account online.

How do Direct Debits compare to other payment methods?

There are 3 common payment methods used to collect gym membership payments:

How do these payment methods compare? Let’s take a quick look:

	DIRECT DEBITS	Recurring Card Payments	Standing Orders
Set Up	Need direct or indirect access from Bacs to take Direct Debit payments. A payment service provider like Xplor Gym can help. Members can then complete a quick digital instruction form to authorise the Direct Debit collection.	Need a merchant account and a card machine, virtual terminal and/or payment gateway to accept card payments (set up and ongoing costs apply). Members can then set up the card payment online, in person and/or by phone giving appropriate permission for future payments to be taken.	No set up requirements to accept standing orders except having a bank account. Member sets up the standing order with their bank for a fixed amount to be made at set intervals to your account.
Flexibility & Control	Giving at least 10 working days’ notice to the member, you can change the amount, frequency and timing of payments taken.	Change the amount and timing of payments collected with no need to notify the member in advance.	Cannot change the amount, frequency or timing of payments. Member will need to cancel the standing order and set up a new one if a change is needed.
Receipt of Funds	Timing dependent on whether you are a direct or indirect submitter.	Immediately or next working day after card payment processed.	Same working day as the fixed amount is debited from the member account.
Payment Failures & Defaults	Automated resubmission processes minimise payment default rates.	Higher failure and default rate due to expiring and cancelled cards, as well as lack of available funds. Card updater services available.	Manual work required to identify payment failures.
Member Protections	Direct Debit Guarantee protects members. It protects against erroneous collections, unexpected changes and inability to cancel payment.	Few protections in place for recurring debit card payments. More protections in place for recurring credit card payments.	No protection should something go wrong with a payment.

Some clubs will also take cash payments for memberships. This comes with the hassle of having to handle and manage cash. But can appeal to older members and those who prefer to use cash. This is getting less common as time goes on.

Direct Debit management for gyms

For all the reasons covered so far, Direct Debits are one of the most popular ways to pay for and be paid for gym memberships. Gym direct debit management can be easy, start by choosing the best payments provider.

How to choose the best payments partner for your gym

Want a fitness business where things run smoothly? Selecting the right gym billing software partner will help you:

Here’s what to look for in a payments partner:

All-in-one, real-time visibility

Ideally, your payments partner will also be your gym management software partner. By choosing an all-in-one gym management software solution with embedded payments, you’ll have live access to up-to-date, complete payments data.

No delays. No switching between systems to cross-reference data. No need to deal with multiple partners. You’ll have the info you need to power better member experiences and get essential tasks completed fast.

I’d recommend Xplor Gym due to the fact that everything is under one roof.

I get all the tools I need to run my business. And as there’s one team to help with everything, I know the people supporting us are a united team. There’s no dealing with multiple suppliers and nothing gets lost in translation!

Dean Ellis, S20 Health & Fitness

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Flexible collection dates

Collect membership payments at the optimal time for your business and your members. How? Thanks to the flexibility to choose from a range of billing dates.

This makes it possible to collect fees as soon as a member joins – no need for pro rata payments by card. And if members have more flexibility over their billing date, it can reduce failures as they are able to choose a date that aligns with payday.

Automated access control

Choose to automatically restrict access for members who have missed a payment. By selecting an all-in-one gym management system with embedded payments and integrated access control this is possible.

When a member makes a catch-up payment, access should automatically be granted without delay. This also makes it possible to let members access your club as soon as they sign up.

Automated resubmissions & notifications

When a Direct Debit Mandate is cancelled or a payment fails, your system should be set up to automatically alert members via email and/or SMS. So, they know what to expect next – for an informed member experience.

Your system should also reattempt to collect payments that have failed due to insufficient funds. This makes it easier to maximise collection rates and retain members.

Accurate revenue forecasting

Accurately forecast future revenue with real-time payments data and handy reporting tools. So, setting effective budgets becomes simpler and you can better strategically plan for growth.

Support for your members

Choose to have your partner help you provide a better member experience by acting as an extension of your business. Members should be able to speak to customer specialists. Experts who can quickly answer payments-related questions.

This extra layer of service can help resolve issues fast and maintain high satisfaction levels amongst members. All while leaving you and your team free to focus on other activities.

Support for you and your team

Of course, you and your team should also be supported by a proactive team who can help you make payments work for your gym.

Getting started with Direct Debits for your gym

If you’re looking to start using Direct Debit for gym membership payments for the first time:

Decide if you want to manage Direct Debits internally or through a third-party partner

If you want to manage Direct Debits internally, you’ll need to have your own Bacs Service User Number (SUN). This is a 6-digit number that’s given to businesses authorised to collect Direct Debits, normally it’s issued via your bank.

For many busy gym operators, the process of obtaining a SUN and then managing collections is too labour intensive. So, choosing a third-party partner who can take away the paperwork and ongoing admin is often ideal.

As well as making sure your payments partner meets the criteria covered previously, your partner should be an FCA-authorised payments institution with proven processes in place to maximise success.

If you already have a SUN, your payments partner should be able to use it when collecting payments on your behalf. If you don’t have a SUN, you should be able to use your partner’s SUN.

Get Direct Debit Mandates from members

You’ll need a Direct Debit Mandate (also known as a Direct Debit Instruction) from your members to be able to collect payments. This gives you permission from the member to collect payments directly from their bank account.

Members will need to sign this mandate. Ideally that should be done digitally as part of your sales process – using your online joining journey or gym member app.

Xplor Gym gives me the data I need as a gym owner to understand how my business is performing.

As well as reliably showing when members have paid, I can see when a Direct Debit fails. I can also use the email and SMS automation tools to let those who’ve stopped paying before their membership has ended know and explain what to do next.

This makes it easier to provide a positive experience without needing to charge for failed payments.

It’s better leave a good impression when a member chooses to leave as they are more likely to return in the future, creating a trustworthy business within the community.

Andy Little

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Switching to a new gym Direct Debit and software partner

If you’re already collecting membership payments using Direct Debits and want to switch to a new partner, the process should be simple.

Your partner should guide you through the process and take on as much of the work as possible for you:

It was imperative for our business to take a phased approach to onboarding and go live. This started with launching Xplor Gym at a pilot site, before rolling out gradually across all 18 sites. We engaged key stakeholders from across our business in the project right from the start. This helped us build a solution that fits our unique needs.

By partnering with Xplor Gym, we benefited from a strong project management team, regular meetings, and a highly collaborative, flexible approach to onboarding.

Xplor Gym’s end-to-end approach to project management has been first class, from implementation to data management and everything in between. We now have a solution that’s best-in-class for both our team members and members alike.

Keith Pickard

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Managing Direct Debit details and rejections

Your gym management system should make it easy to manage Direct Debits for your gym.

Let members update their bank account details online and do this on their behalf. Get notified when members are missing a mandate, so you can follow up to get this put in place.

See when mandates have been cancelled and when payments fail. Rely on automated processes to get these members back in and enjoying their membership.

Everyone aged 18+ who joins on a monthly membership will pay a club enhancement fee that’s used to help us invest in improvements to the club.

By working closely with the team at Xplor Gym, we were able to find a solution that allows us to automatically collect this fee on the anniversary of a member joining. This is a better member experience and makes it easier for us to continue to do better for our members.

So far in 2024, our club enhancement fee has accounted for 9.3% of revenue. That’s a fantastic boost for the club without the effort it used to take to manage.

Lee Button

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The wrap up…

Direct Debits are one of the most popular ways of collecting membership fees for gyms.

This payment method brings benefits for both gym operators and members alike.

As a gym operator Direct Debits help you maintain predictable revenue, stay in control of collections, reduce missed payments, and more. For members, it’s a convenient way to pay, can help with budgeting, and offers security and peace of mind.

Most gyms choose to work with a payments partner when managing Direct Debits. Ideally this will also be your gym management software partner, as an all-in-one solution makes it simpler to maximise collection rates and avoid common issues.

Take the hard work out of managing membership payments with Xplor Gym. As an all-in-one gym management solution with embedded payments, Xplor Gym does the heavy lifting for you.