How to cut failed payments in your PT or class business

A failed payment costs you twice: once in the money you are owed, and again in the time and awkwardness of chasing it. Most failures have ordinary causes, and most can be prevented, or put right quickly, with the right set-up.

Why payments fail

• An expired or replaced card. Every card has an expiry date, and a lost or stolen card is replaced with a new number.
• Not enough money in the account on the day you collect.
• The bank asks to approve the payment. Under strong customer authentication rules, a bank can ask the cardholder to confirm a payment, even one they agreed to earlier, and an automatic payment cannot answer that.
• A cancelled Direct Debit. The client cancels it with their bank, sometimes by mistake while tidying up their payments.
• A closed or changed bank account.

Ten ways to collect more on time

1. Put regular payments on Direct Debit

A bank account does not expire, so Direct Debit avoids the commonest card failures. Use it for monthly packages and memberships, and keep card for one-off payments. Bacs Direct Debit or card compares the two.

2. Collect on a predictable date

Collect each client’s payment on the same date every month, such as the day of the month they started. Clients plan around a date they know, and you can see at a glance who is due.

3. Tell clients before you collect

The Direct Debit scheme requires advance notice of the amount and date. The notice also works as a reminder to have the money there.

4. Let clients update their own details

When a card is replaced, the quickest fix is a secure link where the client enters the new card themselves. Never ask for card numbers by message, email or phone.

5. Retry once, after a few days

Many failures are about timing: the money arrives a day or two later. One retry a few days after the failure recovers many of them. Trying again and again on the same day rarely helps.

6. Make bank approval easy

When a bank asks the client to approve a payment, an automatic retry will fail in the same way. Send the client a link that takes the payment again and opens their bank’s check, so they can approve it in a minute.

7. Know on the day

Set things up so you hear about a failed payment the day it happens, not when you reconcile the month.

8. Talk like a person

Most clients with a failed payment have not noticed. A short, friendly message, such as “your payment didn’t go through this month, here’s the link to update your card”, works better than a formal demand, and keeps the relationship intact.

9. Have a clear, written policy

Your terms should say what happens when a payment is missed, for example that bookings pause until it is paid. Then you can apply it calmly, and in the same way for everyone.

10. Keep the first payment simple

A new Direct Debit takes a few working days to set up. If a new client wants to start this week, take their first month by card and switch them to Direct Debit from the second.

What to avoid

• Bank transfers checked by hand. They are easy to miss and slow to chase, and clients have to remember to pay.
• Keeping card details yourself, on paper, in messages or in a spreadsheet. Let your payment provider hold them.
• Late fees that are not in your terms. If you charge them, say so clearly before the client signs up.

How Apogee helps

• Monthly packages and class memberships default to Direct Debit, with card as the alternative.
• Each client pays on the day of the month they started, or on the 28th if they started on the 29th to the 31st.
• Stripe sends the Direct Debit advance notice before each collection.
• A failed payment raises an alert for you and is tried again once, three days later. The client is emailed about it whatever their notification settings, and for under-18s it is the parent who hears.
• When a bank asks to approve a card payment, the client sees an Approve payment button, which takes the payment again with their saved card and opens their bank’s check.
• Clients change their own card or bank details in the app, and anything unpaid is tried again with the new details.
• The Payments screen shows who has paid, who is due and whose payment failed, and you can pause a client’s access until they are back on track.

Payments go straight into your own Stripe account, and Apogee takes no cut. See how it works, or try the demo.