How to choose the best PAD payment processor

Pre-authorized debit (PAD) is the best way to collect recurring payments in Canada. Banks and credit unions usually fail to streamline and simplify the process of collecting PAD payments for small businesses. Fortunately, to fill this need, third-party pre-authorized debit processors exist to make PAD as easy as possible.

In Canada, there are seven major PAD processors for small businesses to choose from:

Rotessa, GoCardless, Plooto, MazumaGo, EFT Canada, Helcim and Telpay.

All (except for GoCardless) are headquartered in Canada and all are connected to the same federal settlement system. Each processor differs, however, in pricing model and features.

Seven PAD processors with pricing compared

Here’s a quick look at seven popular PAD payment processors and their pricing details compared:

PAD Software	Pricing
	Tiered fixed pricing. Starting at $17 a month. For higher volume (more than 250 payments a month), as low as 35¢ per transaction.
	Two tiers of percentage-based pricing. Standard tier 0.75% plus 40¢ for domestic Canadian payments (capped at $3 per transaction). Advanced tier 1% plus 40¢ for domestic Canadian payments (capped at $4 per transaction).
	$32 a month (includes ten free transactions). 50¢ per transaction after ten. The unlimited plan for $59 a month includes unlimited transactions.
	Percentage-based pricing with a minimum charge. 0.5% with a minimum charge of $2 per transaction.
	Undisclosed
	Percentage-based pricing. 0.5% plus 25¢ per transaction.
	Subscription and per-transaction based. 25¢ per transaction plus 15$ monthly fee and a one-time $99 setup fee.

Main things to Consider When Choosing a PAD Processor

Pricing

As every small business owner knows, pricing is a significant factor when choosing business software. Perhaps the strongest appeal of pre-authorized debits is the cost-saving opportunities. Many of the PAD processors on this list have a fixed fee that severely undercuts the percentage cost of credit card processing.

Not all PAD processors have the same pricing model, however. Some processors, like Helcim and GoCardless have fees based on a percentage of the payment (similar to credit card fees) while some processors have a monthly subscription or per-transaction fee.

Additional fees that some processors have include setup fees, cancelation fees and batch fees (fortunately, most processors on this list don’t have these additional fees).

Features

Each PAD processor will have different feature offerings. When choosing a processor, review the list of product features. One of the most requested features, by many small businesses, is the ability to integrate with other online software. Many of the processors on this list have software integrations with Quickbooks Online, Xero or Sage.

Customer and user experience

Another consideration is what the payment experience will be like for a business and its’ customers. If a processor does not offer a user-friendly payment (or authorization) form it can create unnecessary friction and hassle for the customer.

Similarly, the process of creating a payment should be simple for the business. Before choosing a PAD processor, it’s a good idea to demo or sample the user interface. Ask questions like: does this software look intuitive and easy to use?

Seven Third-party PAD Processors

1. 1. Rotessa
      

      Rotessa is online software that is fully focused on PAD payments (no credit card payments). The software features an easy-to-use interface for smooth withdrawals of customer payments.

      Pricing is set at a fixed rate, starting at $16 per month for the first 10 transactions, with no additional processing fees. Mid to large businesses that collect over 250 transactions, pay 35¢ per transaction. Rotessa integrates with Quickbooks Online and Xero — plus they offer custom API integration. Rotessa is headquartered near Winnipeg.

   2. GoCardless
      

      Like Rotessa, GoCardless only offers PAD payments, specializing in recurring and invoice billing. Unlike Rotessa, GoCardless has a percentage-based pricing model: 1% of the payment plus 40¢, capped at $4.00. Charges above $1,000 are subject to an additional 0.3% charge.

      They integrate with Quickbooks Online, Xero and Sage. While GoCardless offers its services to Canadian businesses, they are actually headquartered in the United Kingdom.

   3. Plooto
      

      Plooto offers both PAD and credit card payments for accounts receivable to small businesses in Canada. They have a monthly fee of $25 which includes ten free transactions. After ten, transactions cost 50¢ each.

      Plooto integrates with popular accounting software Quickbooks Online and Xero. They are headquartered in Toronto.

   4. MazumaGo

      MazumaGo is a relatively new online software among Canadian PAD Processors. Founded in Victoria in late 2019 (initially as DivDot), MazumaGo allows businesses to initiate bank payments from their customers.

      MazumaGo’s pricing model is percentage-based (0.1%) like GoCardless, but with a minimum charge of $2. This means all payments under $2000 have a flat-rate fee of $2 each. Because of this minimum charge, MazumaGo’s software is better suited for businesses with large transactions (thousands of dollars each).

   5. EFT Canada

      EFT Canada is a Toronto-based payment processor that offers electronic payment solutions to Canadian businesses. While the company has been around for nearly twenty years (and even spent a couple of years publically traded) they don’t have a significant online presence. Therefore, not much can be known about their services apart from contacting a salesperson. Not many features are listed on their website and pricing is not disclosed.

   6. Helcim
      

      Helcim is a broader payment software than most on this list. Unlike any of the other PAD software listed, they also produce physical point-of-sale payment terminals for debit and credit card processing. They also offer an online e-commerce payment gateway and online PAD processing. Helcim’s PAD bank transfers are available for a percentage-based fee; 0.5% of the payment plus 25¢ per transaction. They are based in Calgary, Alberta.

   7. TelPay

      Telpay is another PAD option for businesses in Canada. They are an older company, founded in 1985 in Winnipeg.

      Telpay’s pricing model is perhaps the most complex and costly of the seven compared processors. They charge 25¢ per transaction but with a minimum charge of $7.50 per batch file (a batch file is a summary of requested PAD payments sent to the banking network on a daily basis).

      On top of the transaction fees, Telpay also charges $15 a month for their services and support and they are the only ones on this list to have a $99 installation fee. They also have additional fees that are uncommon with most modern software such as a $50 password reset fee.

How to Start Collecting PAD Payments With a Processor

After choosing the PAD processor that best suits a business’s needs, the first step is to sign up. Signing up for a PAD processor requires a couple of steps for security reasons and legally required anti-money laundering compliance. For example, the owner or manager will likely need to submit a personal ID, business documentation and a void business cheque in the sign up process.

Once a business has been signed up and its account has been approved by a PAD processor, it can begin processing PAD payments.