As many of you are already aware, we have made the long-overdue decision to cease accepting cash for the payment of membership fees and trips for the coming season and move to a method of electronic funds transfer. Having analysed all the electronic payment methods (credit cards, POS systems, bank transfers, PayPal etc.) the only one that makes sense for us is the direct debit mandate.
This is a standard method of payment in Germany, but there is still a fair amount of misunderstanding about how the system works and how safe it is. This document should answer most common questions that arise, but if you still have concerns you can raise them either by emailing or by asking a board member at one of the social meetings.
Why are we changing the payment methods?
In previous seasons we have accepted cash, vouchers and cheques as methods of payment for both membership fees and for trips. However, cash is a pain to handle; it's easy to make counting errors, it needs to be physically taken to the bank and the security risk involved in handling potentially large amounts of money in an insecure location should not be underestimated. Whilst seeming initially expedient, vouchers entail a lot of work to separately administer, require the beneficiary to collect them and are easily lost or forgotten about. Cheques are not much easier to administer (require manual entry into accounts etc.) and like cash need to be physically presented at the bank.
Electronic funds transfer offers many advantages both to you and the club and these days is the standard way of making payments in all parts of life.
Ignoring cards for a moment there are two main EFT concepts: Bank transfer (Überweisung) initiated by the payer (either using a transfer slip at your bank or on-line banking), and direct debit (Einzugsermächtigung/elektronisches Lastschriftverfahren) initiated by the recipient.
The standard method of paying club membership fees in Germany is by direct debit. Many clubs require this due to their particular payment schedules, e.g. 4 x quarterly or because their membership automatically rolls on into the next year unless cancelled.
The main reason, however, is that it simplifies administration; an important consideration when relying on volunteers with full-time jobs to run a club! By being authorised to debit payment from your account we can produce a list of payments after each meeting, send them to our bank and reconcile the subsequent bank statement to the accounts software with the minimum of effort and potential for error.
Why can't I just pay by bank transfer (Überweisung)?
In order to minimise the time-consuming administrative tasks Treasury has to undertake we need to automate as many processes as possible and reduce manual intervention. This can only work if everything conforms to a predetermined format.
If we could guarantee that everyone would make payment in a timely manner and using the correct data in exactly the right format in the Verwendungszweck (purpose) field on the transfer form, there would be no problem. However, we all know that mistakes are made, details are typed incorrectly and people don't get to the bank as planned. The extra work involved in trying to manually locate and assign each incoming payment on the bank statement with the corresponding member and trip would no longer be a job a volunteer could reasonably be expected to undertake; and that’s ignoring time spent chasing up people who haven’t yet made payment.
Bear in mind also that at some meetings we would be talking about perhaps 150 transactions!
What about POS/credit/EC cards?
The cost involved, both in terms of the hardware required, monthly service fee and the commission that the credit card companies charge on each transaction would make accepting card payments prohibitively expensive.
So how will this work?
When you sign up for membership, in addition to providing us with your personal details (postal & email addresses, contact number etc.) you will need to give us your a) account name b) account number c) Bankleitzahl (bank identification code) of the account you wish to make payments from. We will then use this information to send our bank an instruction (Lastschrift) to debit the MEMBERSHIP FEE from the account you specified. Your signature on the direct debit mandate form you sign authorises us to do this ONCE ONLY. We promise never to withdraw money without authorisation from you for each occasion.
This is called an einmalige Lastschrift or one-off direct debit. Each time you sign up for a trip you will sign the registration form authorising us to take the payment for that trip from the account whose details you supplied on becoming a member. Note: should your details change, it is important that you inform us as soon as possible.
Your details will be stored by us in a strongly encrypted format and in accordance with the Bundesdatenschutzgesetz (German data protection act) and we promise that this information will never be passed to any third party.
What are the advantages to me?
There are several advantages. Firstly, you don't need to worry about withdrawing and carrying large sums of cash around in order to pay for a trip.
Sign-ups will be far quicker as the Trip Captain does not have to count cash but simply ensure you have signed the appropriate form.
As an additional benefit, any refunds you may be due can be wired directly to your account thereby saving you (and us) a lot of trouble. No more lost vouchers or waiting at meetings for the Treasurer!
Could my bank details be abused by a third party?
The German system works to certain extent based on trust. In order to execute direct debit mandates, the organisation wishing to do so must be authorised by their bank. Banks do not just allow anyone to take direct debits!
Once authorised, all they need to do is present their bank with your account details and the sum they want to take (you probably already have this sort of arrangement for your mobile phone bill). Their bank then contacts your bank to execute the transaction. In theory, therefore, any organisation that is authorised to execute direct debits COULD use your bank details to take money from your account without any further authorisation from you. This would, of course, be theft and they would be liable to prosecution. In addition, they would also likely lose their direct debit privileges as a consequence.
Another possible scenario is that your bank details are stolen by someone and used to purchase goods or services from an otherwise reputable organisation. This would, of course, be fraud and likewise the person initiating it would be breaking the law. (This is one reason why many organisations will only deliver goods to the account holder’s address and not to a third party.)
So, am I protected against this!?
Of course. Firstly, we will never pass your data on to a third party. Where stored, it is kept encrypted using strong encryption techniques in accordance with the Data Protection Act (BDSG) and therefore unreadable to anyone, even in the event of theft of the equipment on which it is stored. It will not be stored on the club web server or any other internet device that could be compromised by hacking. It will not be stored in a clear-text format.
The main safeguard, however, is provided by the banking system. It protects you from these sorts of abuse by allowing you (at least) six weeks to revoke any transaction, regardless of the reason, and have your money returned (something, incidentally, that you are not able to do with a transfer initiated by you). Your bank claims the money back from the recipient bank and credits it back to your account thus protecting you from fraudulent or unauthorised withdrawals. It is important to realise that it is the banks that are responsible here, so even if the thief has cleared his account out and absconded, you will still get your money back!
We do, however, remind you that this is NOT an approved way of cancelling a trip. You must follow the prescribed procedures as set out in the relevant sections of the season guide and web site.
What other safeguards are there?
If (due to some oversight on your part) your account has insufficient funds to cover the amount you have authorised us to debit, the transfer will be rejected by your bank; i.e. your account will not be forced to become overdrawn because of it.
I don't have a German bank account, how can I pay for membership/trips?
This is a potential issue for some members, in particular those in the US military who bank on base and those members no longer resident in Germany.
One possibility, if you have a suitable friend, is to arrange payment through them. You give them the cash and we take the payment from them. We would need written authorisation from them in order to do this.
If this is not possible, in exceptional cases we can arrange for you to make a transfer to our bank account using the IBAN. However, this causes us a lot of work. In order to assign the incoming payment as coming from you and for the correct purpose (memberships or a specific trip) the information on the transfer MUST be correct. You will need to talk to the appropriate board member for more information about this method.
Can I still pay by cash?
No. We do not want to be handling cash at all for the reasons stated above.
I cannot make the meeting, how can I sign up for a trip/membership?
As in the past, you can get another member to sign up for you by proxy. To ensure that they are authorised to do so, however, they will need to bring a letter from you authorising them to a) sign you up for membership or a specific trip and b) authorise the direct debit mandate (and provide your bank details if we do not already have them).
For your convenience, if you have already paid a deposit for a trip at a previous meeting you have the option of allowing us to take the balance without you physically attending a meeting and signing another form; in this case we just need you to send a confirmatory email. Again, we will not make a withdrawal without receiving your permission on each occasion.
I have a voucher from last season; can I still use it for payment?
Vouchers are valid until the end of the season following issue therefore those issued last season (July 1st 2008 - June 30th 2009) will be honoured.
How do I receive a refund due to me?
As we have your bank details already, once approved, the funds will simply be transferred to your account. No need to chase the Treasurer for a cheque or voucher!
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