Pre-Authorized Debit
Reach out to BlueSnap Merchant Support to enable this payment method.
Pre-Authorized Debit (PAD) is a popular Canadian debit payment method where money is electronically withdrawn from the shopper’s bank account and then deposited into the merchant’s own bank account. PAD payment transactions are monitored by our built-in fraud prevention capabilities, the same as credit card transactions.
Benefits
- Boost your sales in Canada by reaching additional shoppers who do not use credit cards or other payment methods.
- Eliminate the need for paper checks and instead enable customers to provide their payment info online.
- Store shopper account information for easier repeat purchases.
- Enjoy transaction costs that are typically lower than credit card transactions.
- Reduce issues with failed payments due to failed or invalid cards, since bank accounts do not have an expiration date, and your shoppers rarely switch banks.
- Solution for B2B transactions and other payments for high-cost items where a credit card limit could be exceeded.
Supported Currencies
Canadian (CAD)
Supported Shopper Countries
Canada
Transaction Processing
These are the main steps involved in processing Pre-Authorized Debit payments:
- On the checkout page, your shopper selects Pre-Authorized Debit and enters their routing number, account number, and personal details.
- Once they have entered their info, the shopper accepts the mandate authorizing their account to be debited and submits the payment.
- When your shopper submits the transaction, BlueSnap verifies that the routing number corresponds to a financial institution and that the bank account number is valid.
- If both are valid, BlueSnap creates an invoice in pending status and sends the transaction for processing.
- If the BSB number is not valid, BlueSnap returns an error message and the transaction is not sent for processing.
- Within 3 business days, the bank will notify BlueSnap if the payment was declined.
- If the payment was declined, BlueSnap will update the status of the invoice to be canceled and a Decline IPN will be sent.
- If BlueSnap does not receive the notification within this timeframe, the invoice status will be set to approved.
- If the bank sends a declined status after 3 business days, the invoice status will be set to refunded.
Notes
- We have validation criteria in place and will return an error if an invalid account number is entered.
- We recommend delivering the product only after you receive the approval.
- Shopper Identity Verification: For PAD transactions of $1,000 or more, banks in Canada must verify the identity of persons or entities involved in the transaction. The Canadian AML guidance on EFTs can be found in item 1(f) here. Refer to section 95(1)(b) for the full legislation.
To minimize the potential for PAD transaction declines, we recommend you pass your shoppers' name and as much address data as possible.
Chargebacks
Your shopper has 90 days to dispute the debit on their account. If this occurs, BlueSnap removes the funds from your account, and the invoice status is updated to refunded. Please note that some banks might allow a longer timeframe for reversals.
BlueSnap Declines
We have improved our validation, making it more comprehensive. With these validations in place, there is less of a chance of rejection from the banks. You might see higher decline rates from BlueSnap, but keep in mind that these declines act as protection from a rejection fee, since the transaction likely would have been declined by the bank.
Resolving Payment Rejections
Payments can be rejected for a variety of reasons, including insufficient funds. To resolve a payment rejection, the shopper may provide an alternative payment method and resubmit the charge.
BlueSnap Checkout and API Integrations
To process Pre-Authorized Debit transactions via BlueSnap Checkout or API Integrations, make sure that you enable this payment method. Learn more about how to do that here.
- If you are using the BlueSnap Checkout, this payment option automatically appears to shoppers in Canada once it has been enabled. BlueSnap supports this payment method with BlueSnap Checkout only.
- If you are using BlueSnap's API, refer to our API guide for Pre-Authorized Debit Payments.
Sandbox Testing
You may use the following bank credentials to test various scenarios.
Simulate declined transaction*
Account Number:9990000004
Routing Number:001004820
Simulate approved transaction*
Account Number:9990000001
Routing Number:001004820
Note: After the initial transaction request, you will see the status change within an hour.
Transaction Amount Requirements
Pre-Authorized Debit Payments require that transactions don't exceed $ 99,999,999.99 CAD.
Subscriptions
BlueSnap supports subscriptions with Pre-Authorized Debit Payments.
Note that the following types of subscriptions are not supported:
- Daily Subscriptions
- Weekly Subscriptions
- Subscriptions with Trial
Refunds
Refunds can only be processed after the shopper's account has been debited and the invoice status has changed to approved:
- If you request a refund while the invoice is pending (before the shopper's account has been debited), you will receive an error message informing you the transaction has not yet settled.
- If you request a refund after the invoice status has been updated to approved, BlueSnap removes the funds from your account and updates the invoice status to refunded.
Partial refunds and multi-partial refunds are not supported. If either is attempted, you will receive an error message.
You can issue a refund through the Merchant Portal. For details, see Issuing a Refund.
Chargebacks
Chargebacks can be requested by the shopper after the date on which their account was debited (i.e., debit date). The way chargebacks are handled depends on how long after the debit date the chargeback was requested.
Within 90 days of debit date
Chargebacks requested within 90 days of the debit date are automatically honored. This means that if a chargeback occurs within these 90 days, the shopper's account is credited. BlueSnap removes the funds from your account and the invoice status updates to refunded. Merchants who wish to challenge or represent chargebacks should contact BlueSnap support to request the relevant payment details and then contact the shopper's issuing bank directly.
More than 90 days after debit date
Chargebacks cannot occur more than 90 days after the debit date.
Return Codes
A transaction may be returned or reversed by a bank for various reasons. The following is a list of PAD return codes, or reasons for reversal.
Bank Returned/ Dishonored Items
For each of the following, unless otherwise specified, do not retry and contact the customer to resolve the issue. They may need to correct their account information.
Canadian ACH Return Code | Full Returned Item Reasons | Action |
---|---|---|
900 | Edit Reject | |
901 | NSF (Debit Only) | |
902 | Account not found | |
903 | Payment Stopped/Recalled | |
905 | Account Closed | |
907 | No Debit Allowed | |
908 | Funds Not Cleared (Debit Only) | |
909 | Currency/Account Mismatch | |
910 | Payor/Payee Deceased | Do not retry |
911 | Account Frozen | |
912 | Invalid/Incorrect Account No. | |
914 | Incorrect Payor/Payee Name |
Customer Initiated Returns (915-921) Debits Only
For each of the following, contact BlueSnap support and the shopper's bank to contest dispute.
Canadian ACH Return Code | Full Returned Item Reasons |
---|---|
915 | No Agreement Existed — Personal and Business |
916 | Not According to Agreement — Personal |
917 | Agreement Revoked — Personal |
918 | No Confirmation/Pre-Notification — Personal |
919 | Not According to Agreement — Business |
920 | Agreement Revoked — Business |
921 | No Confirmation/Pre-Notification — Business |
922 | Customer Initiated Return |
990 | Institution in Default |
Other issues
For each of these, contact BlueSnap support and the shopper's bank to contest dispute.
Category | Canadian ACH Return Code | Full Returned Item Reasons |
---|---|---|
Customer Initiated Returns (922) Credits Only | 922 | Customer Initiated Return |
Bank Default | 990 | Institution in Default |
Updated 3 months ago