Stripe users in Canada and the United States can accept pre-authorized debit payments (PADs) from customers with a Canadian bank account using the Automated Clearing Settlement System (ACSS) provided by Payments Canada.
Before debiting a customer’s bank account, businesses must first collect a mandate from the customer defining a specific payment schedule or terms. The mandate includes the customer’s institution number, transit number, account number, name and email.
Canadian pre-authorized debits are a reusable, delayed notification payment method. This means that it can take up to 5 business days after initiating a payment to receive notification of success or failure. PADs are not a guaranteed payment method, there is a risk of failed payments and disputes.
You don’t actually have to integrate Canadian pre-authorized debit and other payment methods individually. If you use our front-end products, Stripe automatically determines the most relevant payment methods to display. Follow a quickstart for one of our hosted UIs:
After setting up your payment form, activate the payment methods you want using the Stripe Dashboard.
Other payment products
The following Stripe products also support adding Canadian pre-authorized debit from the Dashboard:
If you prefer to manually list payment methods or want to save Canadian pre-authorized debit details for future payments, see the following guides:
- Manually configure Canadian pre-authorized debit as a payment
- Save Canadian pre-authorized debit details for future payments
During the payment flow, Stripe helps you collect a mandate which gives your business authorization to debit the customer’s account. In Canada, these are called pre-authorized debit agreements or PAD agreements. The mandate collection, confirmation and pre-debit notification requirements for pre-authorized debits are governed by Payments Canada’s Rule H1 for pre-authorized debits (PADs).
Instructions for collecting mandate acceptance can be found on the Accept a payment page. In the unlikely event that your business requires a custom agreement, information on how to create a mandate that meets Payments Canada requirements can be found on the Custom PAD mandate agreements page.
Stripe will initiate the first debit immediately after mandate acceptance. Your customers must receive confirmation of a new mandate within 5 days after they have accepted the mandate (see Mandate and debit notification emails).
Customers can at any time request the cancellation of a mandate, including by properly giving oral notice of cancellation. To cancel a mandate, a customer must either reach out to the business they established the mandate with, or to their bank. Canceling a mandate invalidates any further debit requests that you issue using this mandate. If you wish to accept additional payments from the customer, a new mandate must be established with them.
Each PAD mandate must specify a payment schedule that defines when and how debits may be automatically charged to a customer.
Subsequent payments for set interval PADs can be charged to customers outside of your checkout flow on a specified schedule or based on triggering events clearly described in the mandate with an interval description.
One or more debits that occur with predictability, such as:
Debits that are infrequent or irregular and not at specified or predictable periods or time. Sporadic PADs can be charged to customers at arbitrary times, but only with the express authorization of the customer at the time of payment (such as logging into your website).
An example of a sporadic payment could be a balance owed by the customer where payment is triggered by the customer rather than automatically by you at a certain time. Collecting bank account details and a
|A mandate that would allow both |
Mandate and debit notification emails
The Payments Canada network rules require that you notify your customer:
- When a mandate is established
- Each time a debit is made on their account
In addition, should your customer’s bank account need to be verified using micro-deposits, Stripe will send reminder emails linking to a hosted verification page.
By default, Stripe automatically sends emails to the customer for these cases. You can customize the colors and logo for these emails to fit the design and branding of your business.
If you prefer to send custom notifications, all of these emails must be supported. It is not possible to send custom notifications for only one of them.
To send custom notifications:
- Turn off Stripe emails in the Stripe Dashboard email settings
- Send a mandate confirmation email when you have collected your customer’s bank account and mandate authorization.
- Mandate confirmation emails must be sent no later than 5 calendar days after your customer has accepted the mandate. Stripe will initiate the first debit immediately after mandate acceptance.
- The email must include the mandate you created for the debit (see Custom PAD mandate agreements) and the bank account information collected from your customer, including the institution number, transit number and last four digits of the account number.
- Use the charge.pending event to trigger debit notification emails.
- Debit notification emails must include: your contact information, the last 4 digits of your customer’s bank account, and the amount to be debited.
Canadian pre-authorized debits provide a dispute process for bank account holders to dispute payments. Customers can dispute a debit payment through their bank on a “no questions asked” basis for up to 90 calendar days after a debit on a personal account or up to 10 business days for a business account. The customer’s bank may honor any dispute within this period.
When a dispute is created, Stripe sends both the charge.dispute.created and charge.dispute.closed webhook events, and deducts the amount of the dispute and associated dispute fee from your Stripe balance.
Unlike credit card disputes, all PAD disputes are final and there is no process for appeal. If a customer successfully disputes a payment, you must contact them if you want to resolve the situation. If you’re able to come to an arrangement and your customer is willing to return the funds to you, they must make a new payment.
If you proactively issue your customer a refund while the customer’s bank also initiates the dispute process, your customer may receive two credits for the same transaction. You should follow the guidelines in the following section on refunds to avoid this happening.
Pre-authorized debit payments are subject to a minimum 5 business day payout timing from charge creation. If your payout timing is longer than 5 business days, payouts from PAD payments will be unified with card payouts.
Presentment currency Optional
Most bank accounts in Canada hold Canadian dollars (CAD), with a small number of accounts in other currencies, including US dollars (USD). It is possible to accept PAD payments in either CAD or USD, but choosing the correct currency for your customer is important to avoid payment failures.
Unlike many card-based payment methods, you may not be able to successfully debit a CAD account in USD or debit a USD account in CAD. Most often, attempting to do so will result in a delayed payment failure that will take up to 5 business days.
To avoid these failures, it is safest to take PAD payments in CAD unless you are confident your customer’s account will accept USD debits.
Refunds for PADs must be submitted within 180 days from the date of the original payment. Refunds require additional time to process (typically 3 business days). If you accidentally debit your customer, please contact them immediately to avoid a payment dispute.
Refunds are processed only after the payment process is complete. If you create a full or partial refund on a payment that hasn’t yet completed, the refund is actioned when the
Charge object’s status transitions to
succeeded. If the
Charge object’s status transitions to
failed, the full or partial refund is marked as canceled because the money was never debited from the customer’s bank account.
PAD refunds are not explicitly labeled as refunds when the funds are deposited back to a customer’s bank account. Instead, refunds are processed as a credit and include a reference to the original payment’s statement descriptor.
Due to longer settlement time periods and how banks process PAD transactions, there is potential for confusion between you, your customer, your customer’s bank, and Stripe. For example, your customer may contact both you and their bank to dispute a payment. If you proactively issue your customer a refund while the customer’s bank also initiates the dispute process, your customer may receive two credits for the same transaction.
When issuing a refund, you should inform your customer immediately that the refund typically takes 3 business days to arrive in their bank account.
Every PAD payment shows up on customers’ bank statements with the name of the merchant. For PAD payments created with Stripe, the name of the merchant is your Stripe account’s statement descriptor. You can override this default behavior for every transaction independently by using a dynamic statement descriptor. To do so, you can specify the
statement_descriptor parameter when creating the
Please note that your statement descriptor will be truncated to the first 15 alphanumeric characters on the bank statement. For example, if your statement descriptor is
ROCKETRIDESLIMITED, the customer will see
Additionally, statement descriptors cannot use the special characters
The table below illustrates the merchant name behavior you can expect on the customer’s bank statement:
|Default statement descriptor||Dynamic statement descriptor||Merchant name||Bank statement descriptor|
Each bank in Canada formats these fields differently. Depending on your customer’s bank, some fields might appear in all lowercase or uppercase.
Statement descriptors and Connect
The charge type of Connect payments changes the statement descriptor and the merchant name, which appears on the customer’s bank statement.
|Charge type||Descriptor taken from|
|Separate charge and transfer||Platform|
|Destination (with ||Connected Account|
|Separate charge and transfer (with ||Connected Account|
A mandate collected for a
on_behalf_of a Connected Account cannot be used with a different Connected Account.