Pre-Authorized Debit

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Please reach out to BlueSnap Merchant Support to enable this payment method.

Pre-Authorized Debit Payments are an alternative to credit cards in Canada. Pre-Authorized Debit is a payment method where money is electronically withdrawn from the shopper’s bank account and then deposited into the merchant’s own bank account. This payment method is supported for payments from Canadian shoppers to merchants in CAD.

Supported Currencies

Canadian Dollar (CAD)

Supported Shopper Countries

Canada

Benefits

• Boost sales in Canada — Reach shoppers who do not use credit cards or other payment methods.
• Eliminate paper checks — Enable customers to provide their payment information online.
• Simplify repeat purchases — Store shopper account information for easier repeat purchases.
• Lower transaction costs — Pre-Authorized Debit transaction costs are typically lower than credit card transaction costs.
• Reduce failed payments — Unlike credit cards, checking accounts do not expire, and shoppers rarely switch banks.
• Avoid credit card limits — Credit cards might impose limits that cause issues for B2B transactions and other payments for high-cost items.

Enable Pre-Authorized Debit Payments

To process Pre-Authorized Debit transactions, you must enable the Pre-Authorized Debit payment method on your BlueSnap account:

1. Log into the Merchant Portal, and go to Checkout Page > Payment Methods.
2. Select Show in the menu next to Pre-Authorized Debit (PAD) Payments.
3. Select Submit.

Transaction Processing

The following steps describe how BlueSnap processes a Pre-Authorized Debit payment:

1. On the checkout page, your shopper selects Pre-Authorized Debit and enters their routing number, account number, and personal details.
2. After they enter their info, the shopper accepts the mandate authorizing their account to be debited and submits the payment.
3. 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 invalid, BlueSnap returns an error message and the transaction is not sent for processing.
4. 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.
5. If the bank sends a declined status after 3 business days, the invoice status is set to refunded.

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   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.
   • Disputes and Refunds: The shopper has 90 days to dispute the debit on their account. If this occurs, BlueSnap will remove the funds from your account and send a Refund IPN, and the invoice status will be updated to refunded. Please note that some banks might allow a longer timeframe for reversals.
   • Resolving Payment Rejections: Payments can be rejected for a variety of reasons, including insufficient funds. To resolve a payment rejection, you can provide an alternative payment method and resubmit the charge.
   • 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. See section95(1)(b) for the full legislation.
     
     In order to minimize the potential for PAD transaction declines, we recommend you pass your shoppers' name and as much address data as possible.

Requirements

Permission to Debit Shopper Account

For certain Pre-Authorized Direct Debit transactions, you must obtain permission from the shopper to debit their account by having them authorize a mandate, also known as a Pre-Authorized Agreement.

Merchants must obtain this authorization in the following cases:

• Subscription payment: When the shopper makes a subscription payment and checks out using an existing debit account or adds a new one at checkout
• One-time payment: When the shopper makes a one-time payment and adds a new debit account at checkout.
• Editing their Returning Shopper account: When the shopper edits their Returning Shopper account and adds a debit account.

You do not need to obtain this authorization when the shopper makes a one-time payment and checks out using an existing debit account.

One approach is to display a mandatory checkbox next to a link that contains the following text: "I authorize the Pre-Authorized Debit Agreement and this transaction, agree to this debit of my account and understand that my account information will be securely stored."

To retrieve the mandate, call BlueSnap's Get Debit Agreement API request. Keep in mind that you need to create the mandate before you can create a PAD transaction.

Send a Pre-Notification Message to the Shopper Before Each Debit

For merchant-managed subscriptions, you must send a message to notify them of each debit. For an example, see Pre-Notification Sample Text.

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Notes

• Please ensure that shoppers are logged in and verified using their credentials before they add or use the Pre-Authorized Direct Debit payment method.
• At this time the dynamic statement descriptor is not supported for this payment method. The soft descriptor provided in the portal will be displayed on the shopper's bank statement.
• The shopper’s routing number should be 9 digits in length:
  • If it is less than 9 digits, add leading 0s.
  • If it is longer than 9 digits, return an error to the shopper.
  • The routing number is a combination of the three-digit financial institution number and a five-digit transit number.

Hosted Pages

Pre-Authorized Direct Debit transactions are supported with BlueSnap Checkout.

Requirements

Merchant-managed subscriptions must complete the following:

• Please ask the shopper to authorize the mandate. For an example, see Pre-Notification Sample Text.
• Send a pre-notification message to the shopper prior to each debit. Find example text below. Please replace all tags with the appropriate payment and merchant details.

Pre-Notification Sample Text

Please replace all tags with the appropriate payment and merchant details:

Dear Shopper,

We will be debiting you <Debit amount>** on <date of debit e.g., 10/02/2022>** from your bank account ending in <Last 4 of the bank account number>.

If you have any questions please contact us at:  
<Merchant name>   
<Merchant address 1> <Merchant address 2>  
<Merchant city> <Merchant province> <Merchant postal code>

Tel: <Merchant phone number>  
Email: <Merchant email>

Thanks,  
<Merchant name>

Sandbox Testing

You may use the following bank credentials to test various scenarios. After initiating the request, please allow one hour for status changes: