Collect Monthly Membership Payments Using Pre-Authorized Debits (PAD)

If you run a dance studio, fitness club, tennis center, or other membership-based business, offering pre-authorized debits (PADs) for monthly payments can simplify billing and improve cash flow. PADs allow you to automatically withdraw funds from your members’ bank accounts, reducing missed payments and administrative headaches.

In this article, we’ll walk you through the process of setting up pre-authorized debits for your monthly payments and membership renewals.

What is a Pre-Authorized Debit (PAD)?

Why Offer Pre-Authorized Debits for Memberships?

Pre-authorized debits provide several benefits for membership-based businesses:

• Predictable Cash Flow – Ensure a steady stream of revenue each month.
• Reduced Administrative Work – Automate payment collection and reconciliation.
• Lower Transaction Fees – PADs typically cost less than credit card processing.
• Fewer Payment Failures – No expired cards or declined transactions due to credit limits.
• Improved Customer Experience – Make it easy for members to pay without needing to update their payment details frequently.

Step 1: Choose a Pre-Authorized Debit Provider

To start accepting PADs, you’ll need to work with a payment processor that supports bank-to-bank transfers. Some popular options in Canada include:

• Stripe – Offers PADs as part of its payment solutions.
• GoCardless – Specializes in recurring payments with a simple setup.
• Rotessa – Canadian-focused PAD provider with flexible pricing.
• Your Bank – Many financial institutions offer direct debit services.

When selecting a provider, consider:

• Transaction fees
• Integration options with your membership software
• Ease of setup and customer experience
• Customer support availability

Step 2: Create a Membership Form

To streamline the process of collecting customer information and obtaining approval, you need a well-designed membership form. Here’s how to create one:

1. Choose a Platform

Decide whether you want to use a digital form builder (like Activity Messenger, Google Forms, or JotForm) or a paper-based agreement. We recommend for automation and convenience.

A platform like Activity Messenger allows you members to store their memberships cars in their Apple wallet or Google wallet.

2. Include Key Membership Details

Your form should clearly outline the membership options available, including:

• Membership tiers and pricing
• Billing frequency (e.g., monthly, quarterly)
• Cancellation and refund policies

3. Collect Customer Information

Ensure your form gathers all necessary details:

• Full name
• Contact information (email and phone number)
• Address (if required for billing purposes)

4. Bank Account Authorization

For PAD payments, you must collect the following banking details:

• Bank name
• Transit number
• Institution number
• Account number

You can use a void cheque upload option to reduce errors in account entry.

5. Get Digital Authorization

Most payment providers require a legally binding digital signature or a checkbox confirming the customer’s consent to pre-authorized charges. Make sure this is included in your form.

6. Integrate with Your Payment Provider

If you use an online form builder, see if it integrates directly with your payment processor to automate onboarding and payment collection. By designing a clear, easy-to-use membership form, you can make it easier for customers to sign up and ensure GDPR compliance.

Stripe fully integrates with Activity Messenger to make payment collection seamless for both customers and businesses.

Step 3: Communicate with Your Members

To encourage adoption of PADs, clearly communicate the benefits to your members. Send an email explaining:

• Why PADs are a secure and hassle-free payment method
• How to sign up and provide authorization
• What to expect in terms of payment dates and transaction details

Some businesses also offer incentives, such as small discounts or waived fees, for members who switch to PAD payments.

Lower Fees Compared to Credit Cards

Using pre-authorized debits can lower your transaction fees. It can also keep your member enrollment process simple and straightforward.

With Activity Messenger, you get lower fees, faster payments, and fewer manual tasks. Plus, it keeps the customer experience high.

Comparison of Payment Methods

Payment Method	Processing Fees*	Payout	Settlement
Pre-Authorized Debit	1% + 40c	5 days	Automated
Interac	0%	Instant	Automated**
Credit Card	2.9% + 30c	1-3 days	Automated
Offline	Yes	Client dependant	Manual

*Excludes all fees charged by registration software and can vary from bank to bank. Credit card fees and bank transfer fees are based on stripe fees. Note that Activity Messenger charges a 1% fee on all transactions.
**Activity Messenger is the only registration platform that can automate Interac settlements.

Start Accepting Pre-Authorized Debits For Your Memberships Today

Setting up pre-authorized billing for your membership-based business is a smart move that streamlines payments and improves financial stability. By choosing the right provider, obtaining proper authorization, and communicating effectively with your members, you can ensure a smooth transition to automated billing.

Want an all-in-one solution? Activity Messenger integrates payment collection, billing, and customer communication, making it easy to manage pre-authorized debits for your business.

Get started today and simplify your membership payments!

Click here to book a call with an Activity Messenger expert.