Credit card auto-renewal is on the rise for membership-based organizations.
At the dawn of the e-commerce era, automatic billing was a pipe dream. Today, it’s widely accepted. NACHA—The Electronic Payments Association says 11 percent of bills are now paid via recurring direct billing to bank accounts. Like billers around the world, associations are adopting automatic billing for renewal payments, too.
In 2005, about 6 percent of associations offered automatic billing via credit card for dues. Today, 25 percent do so, and they collect, on average, about 15 percent of their dues that way.
Breaking It Down
Automatic billing has a “set it and forget it” appeal for associations and members alike, but the mechanics of automatically charging credit cards aren’t as simple as they sound, says Desri Lashley-Rogers, member services operations manager at the American Urological Association.
First, AUA sends a courtesy notification to members enrolled in the auto-billing program prior to charging their cards. At the same time, members whose cards have expired are notified and asked for new card information. After the charges are processed, AUA then must follow up with members whose cards are declined. Lashley-Rogers says that of about 500 members enrolled in auto-renewals in 2013, about 80 had expired cards at renewal time, and about 120 cards were declined on the first attempt to process payments.
“You have to go back and reach out to them, which is where the extra work is, reaching out to those that have declined cards and trying to maintain them in the program,” she says.
AUA began offering automatic credit-card billing in 2008, mainly focusing on delinquent members. With only 500 out of 17,000 dues-paying members enrolled in auto-renewals, it has chosen not to aggressively expand the program—yet. Currently, the work of processing the auto-renewals is managed by one staffer in member services, but Lashley-Rogers says AUA makes “baby steps” each year in improving the workflow, in hopes of enrolling more members in auto-renewal in the future.