Direct debit vs card-on-file

Direct debit is a bank-to-bank pull: the member authorises you to take an agreed amount from their account on a schedule. Card-on-file stores their debit or credit card and charges it each cycle. Both automate collection. They fail in very different ways, and that difference is what actually matters for a gym.

The failure modes are the whole story. A direct debit fails when the money isn’t there — a temporary problem that usually resolves on retry. A card fails for reasons that have nothing to do with the member’s ability to pay, and every one of those requires the member to take action before you get paid.

Card expiry is a silent churn mechanism. Cards last around three years, so in any given month a slice of your membership base has a card quietly heading for expiry. When it lapses, the payment fails, and the member has to be contacted, respond, and re-enter details — three steps at which someone who was already wavering just doesn’t bother.

They never cancelled. They just stopped paying, and nobody caught it.

There’s also a cost difference that compounds. An uncapped percentage on a $150 monthly membership costs meaningfully more than a capped direct-debit fee, every month, on every member.

In New Zealand specifically: direct debit is the rail most gyms run on, and members expect it. Some international platforms only support card payments here — which is worth confirming before you commit, because collecting manually at 200 members isn’t a workaround.

Both are supported. Direct debit is the default for New Zealand and Australian gyms because it’s cheaper and it fails less. Failed payments and mandate status are visible in your billing view rather than surfacing weeks later as an unexplained revenue dip. And we take no cut of either.