How can I set up an automatic payment plan with a student?
Paying cash in lessons is the most common way guitar teachers get paid. It's easy for the student to remember to bring it into lessons and it's easy to give change. But as people feel more and more comfortable using electronic payment methods, you may find that a lot of students prefer some sort of electronic payment method. Let's look at a brief overview of what options you have.
Bank transfer
This is a very simple option and highly recommended. All you need to do is to tell your student to set up an automatic recurring transfer from their bank account to yours. You give them your bank details and they can set up on their Internet Banking an automatic transfer.
There should be no cost to you to receive the funds (depending on your bank) and as long as the student has money in their account on the day of transfer, you will receive payment like clockwork. Many students prefer this method is it gives them control over the payment. If they want to change their bank account or the day of the transfer, they have control.
Credit card reader
It is possible and very cheap to accept credit card payments in lessons as explained in this Q&A. Keep in mind most won't give you options for automatic recurring payments. This can be handy when a student 'forgets' to bring cash - if they have a card on them, you can easily collect payment.
PayPal
It is possible to set up automatic recurring payments via PayPal. While recurring payments is designed for websites (such as LTG), it is possible to email a link to a student who can then create the recurring payment. This option isn't as straightforward as other options, but it is available. Find out more on PayPal recurring subscriptions here.
PayWhirl
PayWhirl focuses on recurring payments and their free plan has no monthly fees. PayWhirl integrates with your website which means it's useful for both in-person teachers and Skype teachers. Find out more here.
Expect more and more companies in the future to offer similar services to PayPal and PayWhirl. Setting up automatic recurring payments with your students is a great way to ensure you get paid every time. Some teachers who started doing this reported that their students started cancelling less often as they knew the money would transfer anyway.