Open Banking is here, and the competition and market authorities say it will drive competition and innovation in retail banking. But what does this have to do with gyms and fitness businesses?
More than you might think. Open Banking has the power to reduce lost revenue and improve conversion for gyms: by making member payments smarter, more reliable, more flexible and more instantaneous.
82 per cent of UK gym membership fees were processed by Direct Debit in 2017 (UK Finance). Gyms choose Direct Debit because it’s automated, rarely fails and doesn’t cost a lot. But even Direct Debit has its drawbacks – it’s not instant, which isn’t ideal for taking those very first payments or for spontaneous add-ons; it carries a small fraud risk and, while payments fail much less often than with cards, they may still fail.
Open Banking is set to make bank to bank payments even more attractive for UK gyms. Regulated payment providers will be able to access members’ bank account information (with their permission), meaning payments are less likely to fail (e.g. triggered when money is in the account), which could save gym businesses thousands of pounds each month.
Open Banking also allows for more secure payments (e.g. authenticated through members’ online banking), and faster payments. Regulated providers will be able to trigger instant ‘push’ payments from members’ bank accounts using the ‘Payment Initiation Service’, giving businesses all the benefits of Direct Debit, without the three day wait.
This all adds up to a powerful payment solution for gyms in the not too distant future. With the right provider, gyms will be able to take instant payments when they need to, and still benefit from automated Direct Debit for monthly fees (with no need to ask permission every time).
Find out more about how GoCardless could help your fitness business
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