What kind of businesses are best suited to use pre-authorized debits?
Pre-Authorized Debits work best for businesses that collect ongoing payments from the same customer. Whether you collect recurring payments on a set schedule or variable amounts from time to time, PADs are a great fit.
A few examples of businesses with recurring payments on a set schedule include: fitness centres — for membership fees, daycares— for monthly dues and Property managers — for rent payments.
There are some cases, however, where the amount of the transaction fluctuates and the timing is not always consistent. Accountants or digital marketing companies are a great example of businesses that use PADs to process variable amounts based on the number of hours they’ve worked.
Unlike Interac or credit cards, pre-authorized debits do not clear instantly and they are required to be scheduled at least 1 business day in advance. This means that Pre-Authorized Debits are not a great choice for businesses that don’t have an established relationship with their customers such as retail or e-commerce.
What are Pre-Authorized Debits (PADs)?
What are the advantages of Pre-Authorized Debits?
What kind of businesses are best suited to use authorized debits?
How do pre-authorized debits work?
Are pre-authorized debits secure?
How do I start accepting pre-authorized debits?
What is an authorization and why do I need it for pre-authorized debits?
