Pre-authorized debits (PADs) are considered one of the most convenient ways to pay bills, insurance premiums, and make donations in Canada. Donorbox‘s customers in Canada and the US who use Stripe as their main payment processing system can accept one-time and recurring donations from those with Canadian bank accounts. Read on to learn how!
Pre-authorized debits (PADs) are considered one of the most convenient ways to pay bills, insurance premiums, and make donations in Canada. Through this method, a company directly withdraws funds from the payer’s bank account. This payment scheme called Canadian PADs is administered by Payments Canada.
Stripe nonprofit users in Canada and the US can accept one-time and recurring donations with Canadian PADs from donors having Canadian bank accounts. Since Donorbox uses Stripe as its main payment processing system, nonprofits can easily connect to Canadian PADs via Stripe on Donorbox.
In this blog, we’ll discuss what Canadian PADs are and how you can accept donations with this payment method on Donorbox.
Canadian direct debit or pre-authorized debits (PADs) is a bank-to-bank payment system. All communications are made directly between the organization’s and the payer’s banks. Unlike the transactions made via credit and debit cards, there’s no risk of payment failure due to expired or lost cards. Also, you get to offer your donors with Canadian bank accounts a highly transparent payment method. More on this later.
Security of the process is ensured with a ‘mandate’ system. Your donors must receive a mandate that includes payment schedule, donation amount, terms, donor’s account information, and other important declarations before the account is debited. In the case of recurring payments, the mandate should be sent once only – before the first debit is made.
With Stripe, it can take up to 3 calendar days to initiate a payment after the mandate has been sent.
Donorbox makes these steps a breeze.
All you have to do is ensure you have a Canadian bank account connected to your Stripe that you use on Donorbox. After that, it’s as simple as checking a few checkboxes.
So let’s see how you can start accepting donations with Canadian PADs on Donorbox!
Donorbox partners with Stripe to give you a myriad of secure payment options. Canadian PADs are one of them. Follow the below steps to start receiving donations with Canadian PADs via Stripe on Donorbox.
On the Donorbox dashboard, go to your Organization Info and ensure your country is set as Canada (image 1). You have to check the same on your connected Stripe account. Go to your account that’s connected to Donorbox and make sure the country is Canada (image 2).
Image 1 – Donorbox organization info page
Image 2 – Stripe personal details page
This step is necessary to have the option for Canadian PADs available under payment methods on Donorbox.
Next, you have to navigate to the Payment Methods page on Donorbox. You’ll find a section called “Additional Payment Methods with Stripe”. Under it, you need to enable pre-authorized debit payments (PADs) by checking the box next to it.
Select a campaign from the Campaigns page on the Donorbox dashboard for which you want to activate Canadian PADs. Click “Continue Editing” as the next page loads.
Now, click “Amounts”.
Check the “Canadian PADs” box on the page that loads, as shown below.
Click “Update” and you’re done!
You’re now all set to accept donations with Canadian PADs on Donorbox.
Here’s a glimpse into how it looks on your donors’ end.
On the Donorbox donation form, your donors can select “Canadian PADs” under the “Payment” tab.
Next, they’ll have to link their bank account. Donors can select their bank from the list that appears next. (Shown in the image below)
Next is the authentication step. Your donors will log in and select a bank account. They’ll be asked to confirm the account and continue.
In the last step, they’ll click the “Pay” button to initiate the donation.
For donors opting for recurring donations, there’s one additional step after this. They’ll see an option to save their account information.
Your donor will receive a mandate email where details such as donation amount, payment schedule, account information, and how to report/reimburse payments will be mentioned.
You, as the nonprofit organization, will receive a pending mandate email from Donorbox.
For recurring donations, your donor will receive just one mandate email before the first donation. For subsequent donations, they’ll receive a reminder email for the upcoming pre-authorized debit payment.
It takes up to 3 days for the donation to process. Thereafter, you should receive the amount in your bank account connected to Stripe.
Your donor receives an automatic donation receipt from Donorbox. This article shows you how to create and customize a tax-compliant receipt on Donorbox and this blog here offers a downloadable sample.
The transaction fees will include Donorbox’s platform fee of 1.5% and Stripes’s 1%+C$0.40 fee for each successful direct debit transaction.
Learn more about Donorbox pricing here.
You’ll be giving your donors with a Canadian bank account the option for a simple yet secure payment method. Once they authenticate with their banks and approve the mandate, they’ll have more trust in your organization and gain transparency about the process. With a reminder email before each recurring donation, you’ll only be strengthening this pillar of trust between you and these donors.
Transaction fees are often the primary source of bother for nonprofit organizations using online fundraising tools. With Canadian PADs, you get to slice it off to a bare minimum amount and get the most out of your donations.
When your donors sign up for recurring donations with their credit/debit cards, there’s always a risk of failed payments in the future. Cards expire and payments get rejected all too often. Plus, donors sometimes don’t remember their card details while making the payment. In that case, letting them directly log in to their bank account and authenticate the process will save you from losing a potential donor.
WIth Stripe’s 98% payment success rate, Canadian PADs are naturally more reliable.
Now that you know what Canadian PADs are, their benefits, and low transaction costs, it is time that you started accepting donations with Canadian PADs on Donorbox.
Give your donors a highly transparent payment method that also lets you cut down on transaction fees and lower the risks of failed payments in 6 simple steps!
Know more about Donorbox, the all-in-one fundraising solution, on our website here. Do check out features such as peer-to-peer fundraising, crowdfunding, text-to-give, memberships, recurring donations, donor management, and more.
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Product Manager - Integrations @ Donorbox
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