Pre-authorisation explained

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With PaySubsOnline.com, members can pre-authorise future payments so each time money becomes due, it gets automatically collected from the members, transferred to your organisation and reconciled.
 
When a member pre-authorises payment, they are authorising your organisation to collect payment for them, and any members linked to them, for any payment request your organisation wants paid online.
 
Pre-authorising payments is perfect for things like  ‘rolling’ memberships (where the subscription auto-renews), making instalment payments and smaller nominal cash payments (to save the hassle of collecting and banking cash).
 
Debit / Credit Card or Direct Debit?  Your guide to choosing the right payment method for pre-authorisation
 
PaySubsOnline.com uses PayPal to process Debit / Credit Card payments and GoCardless to process Direct Debits (DD – UK clients only).  Both payment providers support pre-authorisation.
 
PayPal – Members can pre-authorise payments by setting up a PayPal account and linking a funding source to it (ie. bank account, debit or credit card).  PayPal pre-authorisation agreements last for just 12 months and are therefore suitable for collecting instalment payments, term fees and ad-hoc amounts within a 12 month period after which the member would need to renew the agreement.
 
Because of the 12 month agreement period, PayPal pre-authorisation is not suitable for rolling memberships that auto-renew.
 
GoCardless – The major benefit of using GoCardless to collect pre-authorised payments is the agreement runs for perpetuity.  That makes it perfect for all types of memberships like monthly and annual rolling memberships, instalments, term fees, regular donations and ad-hocs payments.  For as long as the member is part of your organisation, you can request payment and get paid on time!
 
Examples of pre-authorisation in action 
 
Rolling memberships
 
If your subscription groups are setup to auto-renew (either monthly, quarterly, bi-annually or annually) and you have setup a GoCardless account through PaySubsOnline.com, the system will only offer the Direct Debit option.
 
If you have not setup a GoCardless account, pre-authorisation will be paid via PayPal.  Note, PayPal’s pre-authorisation agreements only runs for 12 months so we strongly recommend Direct Debit for all rolling memberships.
 
Instalments
 
If you have offered the option for members to pay by instalments, the system requires members to pre-authorise payments so each time a payment becomes due, it’s automatically collected and reconciled.
 
For members who have pre-authorised payments, there are implications for the next payment request sent where instalments are enabled.  For example, a member receives a payment request on 1st Jan 2014, opts to pay by instalments and sets up their pre-authorisation agreement.   One year later, the administrator sends out a payment request for next years subs with the option for members to pay by instalments.   By default, the system will collect the first instalment from all members with an active pre-authorised agreement that have a history of paying by instalments.   If the member has no history of paying by instalments and has pre-authorised payments, the system will collect the full amount.
 
If some/all of your members have pre-authorised payments, we recommend that you give notice of the impending payment request as the members may have forgotten they have pre-authorised future payments.
 
Regular donations and running a 100 Club
 
You can use PaySubsOnline.com to collect and reconcile regular donations, great for general fundraising or running a 100 Club.  This works in the same way as ‘rolling’ memberships whereby you can set how much you want to collect and how often.  After members pre-authorise payments, money will be collected until the member cancels.
 
Collecting nominal payments
 
Pre-authorisation is a great alternative to collecting small cash payments.  You can make pre-authorisation a mandatory requirement of membership (see section below) then, each time you want to collect payment online, you can!
 
Sometimes you may need to collect cash to pay for expenses on the day and therefore don’t want to collect that payment online.  That’s fine, PaySubsOnline.com puts you in control of when you want to collect the money online and when you don’t.
 
Mandatory pre-authorisation
 
As mentioned, pre-authorisation is enforced by the system for rolling memberships and instalment payments.  As an administrator, you can also make pre-authorisation mandatory for new members joining and existing members renewing.
 
When setting up your subscription groups, there is a question  ‘Would you like members in this group to pre-authorise future payments so each time your organisation requests payment, money is automatically collected and reconciled?’.  Select ‘Make mandatory’ to that question and as new members register for that group or existing members login to pay, they must pre-authorise future payments.   Thereafter, each time you want to request a fee, it will be collected and reconciled automatically.
 
Cancelling pre-authorised agreements
 
Members can cancel their pre-authorisation agreements by logging in to their PaySubsOnline.com online account, going to the Payment page and clicking on the cancellation link.
 
If the member pre-authorised payments using PayPal, they will be shown a step-by-step guide of how to cancel their agreement once logged in to their PayPal account.
 
For members that have pre-authorised payments with GoCardless, clicking on the cancel link will cancel the agreement.
 
For Direct Debit, it’s possible that member’s will cancel a pre-authorisation agreement whilst payments are being processed.  Depending on how far ‘down the road’ the payment has been processed will determine whether the cancellation will affect funds being transferred to your organisation.  There are a multitude of factors affecting the timing so there’s no hard and fast rule of when a cancelled agreement will affect a payment.  Failed payments due to cancellation of pre-authorised agreements are highlighted in the Payment Reports (the amount payable appears in red).
 
If a member cancels their Direct Debit pre-authorisation agreement, the administrator will receive an email from PaySubsOnline.com notifying them of the cancellation.  We will be adding the same functionality for PayPal.
 
Refunding payments where the member has pre-authorised payments
 
After refunding a payment, the payment request becomes due again until it is either paid or deleted.  As PaySubsOnline.com collects money from members who have pre-authorised payments automatically, we have put logic in place to prevent the system from collecting payment for a payment request that has been refunded for a member that has pre-authorised payments (otherwise you would go round in circles!)
 
Failed payments
 
Scheduled payment requests (like renewals or instalments) are generated at 00.01 GMT on the due date.  For members that have pre-approved payments, money will be collected and reconciled.  If the payment fails it will appear in the Failed Payment Report (this is in the payment report section).
 
We will soon be adding functionality that will send an automatic email to the administrator notifying them of the failed payment.  The member will receive a failed payment notice from the payment provider (PayPal or GoCardless) but we also plan to add a notification from PaySubsOnline.com to the member too.
 
By default, the system will try and collect the payment again at midnight the following day and every subsequent day thereafter until payment is made or the payment request deleted.
 
Outstanding existing balances
 
Any outstanding payment request will be collected when a member setups pre-authorisation.
 
Transaction execution timing
 
Below is a summary of when the payment process is executed for members that have pre-approved payments:
 
Payment due at the point of registration – pre-approval required: Immediate
 
Payment request  generated by adminstrator for current day: Immediate
 
Member logs in to make a payment – pre-approval required: Immediate
 
Member logs in to register for an extra or an event when they are already pre-approved: Immediate
 
Scheduled payment request for future date: 0:01am on scheduled date
 
Note, payment by Debit/Credit Card appears instantly as cleared funds in your organisations PayPal account upon execution of the transaction.  Direct Debit payments can take 6 working days for the first payment of a new agreement and 3 working days for each payment thereafter.
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