![]() ![]() ![]() If you choose to take this route, don’t forget that PAD and ACH Debit are two completely different schemes, with their own rules and submission requirements. Your business would need a separate agreement with your bank in order to make this possible. The ACH system also works in Canada, allowing you to receive payments in US dollars from clients based in the US. This is a method for receiving US dollar-denominated payments. If you do business across both the US and Canada, you might already know about the US Direct Debit scheme, called ACH (Automated Clearing House) Debit. This refers to many different types of electronic transfers between bank accounts, but is sometimes used to refer specifically to Pre-Authorized Debit. The term AFT comes from the AFT messaging standards used to process transactions in the ACSS system.Īnother term you may sometimes read about is the afore-mentioned EFT (Electronic Funds Transfer). In a more general sense, AFTs also include transactions where financial institutions move money electronically between payers and payees. What all these transactions have in common is that they are all submitted to the ACSS via the banks. It encompasses a broader range of automated payment types than just PADs, including both Pre-Authorized Debit and Credit transactions. You may also have heard the term AFT Debit being used in the Canadian context, as well as PAD. This happens by means of the Automated Clearing Settlement System (ACSS), rather than via the credit and debit card networks. Just like Direct Debit in other countries, PAD is a bank-to-bank system, meaning that all communications take place directly between the banks. Payments Canada is the body in charge of administering the scheme. In Canada, Pre-Authorized Debit (PAD) is the scheme used for collecting Direct Debit payments from customers. Get started in minutes Learn more What is a Pre-Authorized Debit? ![]()
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