How to access Pre-Authorized Debits

Now that you’re familiar with what PADs are, how they compare to similar schemes, and their different types, we’ll discuss how to access PADs and get started using them to take payments from your Canadian customers.


Accessing Pre-Authorized Debits

To use the Pre-Authorized Debit scheme for taking payments, you can choose between two options:

  1. Direct access - via your bank.
  2. Indirect access - via a payment processor like GoCardless.

Here, we’ll discuss each option in more depth and provide some pointers on how you can choose the right one for your business, based on its size and requirements.

1.Direct Access

If your business is large, you may prefer to manage Pre-Authorized Debit collections in-house. To do so, you’ll need to arrange the process via your business bank. The bank is known as a ‘Member’, which submits directly into the ACSS network.

Once you’ve spoken to your bank and been approved, the next step is to sign a written agreement, called a ‘Payee Letter of Undertaking’, between your business and the bank. This outlines your responsibilities under the scheme, along with your agreement to comply with the Pre-Authorized Debit rules.

After signing the agreement, you will need to decide how to conduct your collections. You can either use a direct integration with your bank, or use accounting software that has already been integrated with the bank. Alternatively, you could avoid the complexities of managing the payment process with the bank, by deciding to access PADs through a third-party payment processor - we call this 'indirect access'. We explore these in more detail below.

Direct integration with the bank

If you choose this option, your bank will normally provide you with its implementation guides. You’ll also need a strong technical team to get the integration up and running, including setting up the logic for collecting and storing payment information.

Some banks allow you to avoid the technical implementation by using an online portal to input payment requests, although this may produce a payment collection process that’s overly manual and requires additional time and resources.

2. Indirect access via a payment processor

Another way to avoid dealing with the complicated PAD submission process is to let a payment provider handle it on your behalf. If you choose this route you won’t need a Letter of Undertaking from your bank, as you can just use the payment provider’s own agreement.

Payment providers offer varying levels of service and ease of use, so it’s a good idea to do your homework before selecting one. What’s more, many providers don’t publish their pricing. They often charge initial setup fees, either for the service itself, or per customer, in addition to fees for transactions and failed payments.

Indirect access through GoCardless

GoCardless is an online payment provider specializing in PADs that manages the entire collection process on your behalf. With GoCardless, your business can manage all payments either using an online dashboard, via a pre-built partner integration such as Quickbooks, Sage and Xero, or by creating your own integration using the GoCardless API. You don’t need an agreement with your bank, or any expensive software to submit PAD payments with GoCardless.

Another benefit of using GoCardless is that your customers can set up Pre-Authorized Debit payments to you online, instead of filling in paper authorization forms. Once the authorization is in place, you can start automatically collecting PADs from your customers, either on a one off or recurring basis. In addition, GoCardless offers simple and transparent pricing. For more information on collecting Pre-Authorized Debit payments with GoCardless, sign up today for free.

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