What Is PAD? All You Need To Know

bank statement showing ACH completed transfer

What Does PAD Mean?

PAD stands for pre-authorized debit, but is also known as EFT, or electronic funds transfer. Both are an electronic means of transferring funds into, or out of a bank account.

PAD Bank Transfers

Bank Transfers are a convenient way to move money from one bank account to another. For businesses, PAD offers a convenient way to get paid by customers who would prefer not to use a credit card. Though PAD is most often used, these transfers can work in two ways: as a pre-authorized credit (PAC) to a bank account, or as a pre-authorized debit (PAD) charged to an account.

Is PAD Different from Online Payments?

PAD payments let you use your bank account information to make a payment instead of your credit card number. Most online payment platforms offer credit cards as a means to pay, but PAD is quickly becoming a more common method for online payments.

PAD is not instant like most online credit card transactions; they take a little longer to process, but as opposed to credit cards, the chargeback risk on PAD is low.

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How Can I Get Paid With PAD?

Merchants can get paid via PAD when their customers set up a one-time or recurring payment to come from a personal bank account. PAD payments can be made as long as your customer has the necessary information about your business to set your business up as a payee on their account. 

Are PAD Payments Safe?

PAD is considerably safer than carrying cash around for large payments, and even safer than sending a cheque. When it comes to PAD payments, a customer only needs to enter their banking information or your billing information once, so both customers and merchants know that money is going to the right place every time.

Because PAD payments do not work the same way as credit cards, they also do not have the same consumer protections or benefits credit cards do. For merchants, chargebacks are not something which happen regularly (if at all) as with credit cards. For consumers, PAD also doesn’t offer any benefits such as cash back or travel rewards.

Why Use PAD?

Business owners should consider using PAD for a few reasons:

  1. Accepting PAD payments as a business owner can be a very cost effective way to get paid. PAD payments do not charge merchants the same kinds of fees as credit cards.
  2. PAD is convenient and safe for customers (especially those without credit cards).
  3. PAD reduces the need for invoices and paper cheques.

Top 5 Canadian PAD/EFT Payments Providers

  1. Helcim

Helcim’s PAD offering, known as Helcim Bank Payments, is free to use just like the rest of their tools. Helcim also offers credit card processing and even gives businesses the ability to create a fully-hosted online store. Further details:

  • $0/month for any amount of transactions
  • Great for businesses of all sizes
  • Offers low rates of just 0.5% + $0.25 cents per transaction
  • Integrates with their online invoicing and recurring (subscription) billing tools
  • Invoices are customizable to your business
  1. Rotessa

Rotessa offers recurring bank account payments (direct debit) and invoicing for businesses. What you need to know:

  • $14/month for first 10 transactions, no processing fees
  • Over 250 transactions, pay $0.30 cents per transaction, no monthly fee
  • Only direct debit payments, not a credit card processor
  • Works for small businesses and professional services
  1. Go Cardless

Go Cardless is another dedicated bank payments company specializing in recurring payments and invoicing. Their pricing model is a little different than our top 2 picks. Here’s what you need to know:

  • No monthly fee with Standard Package, fee is 1% + $0.40 cents per transaction
  • Get customizable invoices with Plus Package ($75/mo) and stop paying per transaction
  • Can take international payments

4. Wave

Wave is a Canadian company also known for its accounting software, but offers bank payments in addition to its online credit card processing service.

  • Fees are 1% with a minimum charge of $1
  • Also do credit card transactions (integrate with invoicing etc.)
  • No monthly fee
  • 1-6 days processing time

5. Quickbooks

QuickBooks is most famous as an accounting software for small to medium sized businesses. But QuickBooks does a lot more than just crunch numbers. They even do invoicing. Here’s what you need to know about their PAD offering:

  • Fees are 1% for existing QuickBooks customers to a max of $10
  • Also do credit card transactions
  • Monthly fee for QuickBooks Payments in addition to QuickBooks Online account (starts at $25/month)
  • All QuickBooks products come with a 30 day free trial

Who Is Helcim PAD Good For?

Helcim PAD will be available to all merchants, but will be especially beneficial for professional services, like lawyers, accountants, and chiropractors. These types of businesses are already using invoices, recurring payments, and the virtual terminal (over the phone) to process payments, which will now integrate with PAD to make it even more convenient for customers to choose.

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Final Thoughts

While there are EFT/PAD specific providers out there for merchants to choose from, using one processor for EFT/PAD and another for credit cards is likely more hassle than it’s worth. PAD offers customers another convenient payment option, and is cheaper than accepting credit cards for merchants. PAD is secure, and works with a variety of payment tools. If you’re looking to accept PAD payments, give Helcim a try!

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