Is an eSigned authorization valid?

Yes. Under the ESIGN Act (15 U.S.C. ch. 96) and UETA (where adopted), electronic signatures meet signature requirements if intent, consent, attribution, and retention are satisfied.

When is notarization required?

Most payment authorizations do not require notarization; if a specific state or counterparty requires notarization, follow that requirement or use remote online notarization where permitted.

How can a payer revoke authorization?

Include clear revocation instructions in the form; revocation typically requires written notice and a reasonable processing window to stop future charges.

What happens after a chargeback?

Provide the signed authorization and audit trail to the processor or bank; clear authorization language and evidence of consent improve dispute outcomes.

How long should records be kept?

Retain signed authorizations to meet tax, audit, and industry rules—commonly at least 3 years; healthcare records may require 6 years under HIPAA (45 CFR §164.530(j)).

Can I collect full card numbers?

Avoid storing full PANs unless you meet PCI DSS obligations; use tokenization or secure vaulting to reduce scope and liability.

Electronic Signature
Templates
Miscellaneous
Payment Authorization Act

Payment Authorization Act

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

PAYMENT AUTHORIZATION ACT

This Payment Authorization Act (the "Act") is made and entered into as of Effective Date: by and between Client Name: and Payee Name: .

WHEREAS

WHEREAS, Client Name: desires to authorize payments to Payee Name: for services or obligations described in this Act; and

WHEREAS, the parties intend to set forth the terms, authorization, scope, limitations and remedies governing such payments and related handling of confidential information.

SCOPE OF WORK

Description of Services / Obligations

PAYMENT TERMS

Amount Authorized: $ payable to Payee Name: under the schedule below.

Payment Schedule and Method

Acceptable payment methods (check all that apply):

ACH / Direct Debit
Wire Transfer
Check
Credit/Debit Card

Payment Destination / Account Instructions

Late Payment Fee: . Payments not received within days of invoice date shall incur the stated late fee, calculated on the outstanding balance.

TERM AND TERMINATION

Term Start Date: Term End Date:

Either party may terminate this Act for convenience upon written notice to the other party delivered not less than days in advance. Termination for cause shall be effective immediately upon written notice if the non‑breaching party provides substantiation of material breach and the breaching party fails to cure within days.

Upon termination, Client Name shall pay for all approved and delivered services or obligations performed through the effective date of termination. Refunds of advanced payments shall be handled in accordance with the payment schedule and equitable pro rata adjustments.

CONFIDENTIALITY

Each party shall maintain in strict confidence all nonpublic business, financial and technical information disclosed by the other party in connection with this Act ("Confidential Information"). Confidential Information shall not include information that (i) is or becomes generally known to the public through no fault of the receiving party; (ii) was rightfully known by the receiving party prior to disclosure; or (iii) is required to be disclosed by applicable law or court order, provided the receiving party gives prompt written notice to the disclosing party and limits disclosure to the extent legally required.

The receiving party shall take all reasonable measures to protect Confidential Information of the disclosing party, including restricting disclosure to employees, agents or subcontractors who have a need to know and who are bound by confidentiality obligations at least as protective as those set forth herein.

AUTHORIZATION AND REPRESENTATIONS

Client Name hereby expressly authorizes Payee Name to initiate debit and credit entries to the account identified in Payment Destination / Account Instructions and to charge back any erroneous or unauthorized transactions in accordance with the terms of this Act. This authorization shall remain in effect until revoked in writing and processed in accordance with the notice provisions below.

Each party represents and warrants that it has full corporate or organizational power and authority to enter into this Act and to perform its obligations hereunder, and that execution and performance will not violate any applicable law or agreement.

GOVERNING LAW; DISPUTE RESOLUTION

This Act shall be governed by and construed in accordance with the laws of the State of without regard to conflict of laws principles. The parties shall attempt in good faith to resolve disputes by negotiation before initiating formal proceedings.

ENTIRE AGREEMENT

This Act, together with any schedules, payment instructions and attachments executed by the parties, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals and communications, whether written or oral. No amendment shall be effective unless in writing and signed by authorized representatives of both parties.

NOTICES

Client Notice Address Payee Notice Address

Notices shall be effective upon receipt when delivered by hand, nationally recognized overnight courier, or when sent by certified mail, return receipt requested, to the addresses set forth above or to such other address as either party may designate by notice.

INDEMNITY

Each party shall indemnify, defend and hold harmless the other party and its officers, directors, employees and agents from and against any and all claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising out of the indemnifying party's breach of this Act, negligence, willful misconduct, or violation of applicable law in connection with payment processing authorized herein.

Client Printed Name:

By:

Date:

Payee Printed Name:

By:

Date:

What the Payment Authorization Act is and when it applies

The Payment Authorization Act is a standardized written authorization used to permit a payee or processor to debit funds from a payer’s account or charge a payment card on specified terms. It documents payer identity, payment method, amount or frequency, and the legal consent to initiate and repeat charges. Organizations use it for one-time settlements, recurring billing, refunds, and third‑party payment arrangements. When executed correctly, the authorization creates an auditable record that supports dispute resolution, tax reporting, and regulatory compliance under electronic signature laws such as ESIGN (15 U.S.C. ch. 96) and UETA.

Why a clear payment authorization matters

A clear, signed authorization reduces chargeback risk, documents consent, accelerates collections, and preserves evidence for audits or legal disputes while enabling compliant electronic signing and secure storage.

Typical users and signers of a Payment Authorization Act

Organizations and individuals who collect payments use this form to document consent and payment specifics before initiating charges.

Real Estate professionals authorizing rent or escrow disbursements; landlords and property managers sign for collection authority.
Healthcare providers and billing offices capturing patient payment consent while meeting HIPAA privacy and recordkeeping needs.
Financial services and merchants using authorizations for recurring payments, loan payments, or direct debits.

Use or acceptance often depends on internal policy, industry rules, and applicable state or federal requirements.

Core components every professional Payment Authorization Act should include

A complete authorization balances clear payment terms, signer identity, authentication, and revocation mechanics to stand up to audits and dispute challenges.

Authorization clause

Explicit language authorizing the exact payment action, describing one‑time or recurring debits, and naming the payee or processor to avoid ambiguity in enforcement.

Payment method

Specify card type, last four digits, ACH routing/account numbers, or third‑party processor; include acceptable backup payment options and security handling notes.

Amount and timing

State either a fixed amount, variable range, or formula plus frequency (e.g., monthly on the 1st); identify the initial charge date and any trial period.

Identity & contact

Full payer legal name, billing address, email, and phone number to support attribution, KYC checks, and dispute communications.

Revocation and notice

Describe how a payer withdraws consent (method and advance notice required) and who to contact for cancellations or disputes.

Signature & audit

A dated signature block with signer role and an audit trail entry (timestamp, IP, authentication method) to show intent and attribution.

Security and compliance essentials to protect payment authorizations

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest

Audit trail: Timestamps, IP, and action log

HIPAA ready: BAA available where required

Regulatory scope: ESIGN and UETA compliance

Access controls: Role‑based permissions and SSO

Certifications: SOC 2 Type II and ISO 27001

Step-by-step: complete a Payment Authorization Act

Follow these four steps to create a clear, enforceable authorization that supports eSignature and audit requirements.

01

Prepare form: Populate payer, payee, payment details, and clear revocation terms.
02

Verify identity: Confirm payer identity using ID, KBA, SMS code, or other agreed method.
03

Obtain consent: Have payer sign and date using a compliant eSignature process.
04

Store evidence: Save signed copy plus audit trail for retention and dispute support.

How to configure a secure eSubmission workflow

Configure fields, signer authentication, and notifications to minimize friction while meeting legal and merchant requirements.

Field	Configuration
Authentication Method	Email link, SMS code, or KBA depending on risk level
Signature Fields	Required signature, initial fields, and date stamps
Conditional Fields	Show payment details only if payer selects recurring option
Retention Policy	Automated retention per company and regulatory rules

Typical routing for online payment authorizations

A compact workflow reduces signer friction while preserving auditability for compliance and disputes.

Upload Document: Sender uploads template with payment fields placed
Add Signer: Enter payer contact and choose authentication level
Signer Action: Payer reviews, authenticates, and signs electronically
Completion: Signed copy and audit trail distributed and archived

Technical considerations for eSigning and eSubmission

Choose a platform that supports required authentication, audit trails, and secure storage for payment authorizations.

File formats: PDF, DOCX, or HTML
Integrations: Salesforce, NetSuite, Microsoft 365
Authentication: Email link, SMS, or stronger methods

Timing expectations and common processing windows

Set clear internal deadlines and communicate expected processing times to payers to reduce disputes and failed payments.

Onboarding delivery:

Provide authorization before first transaction; obtain signed consent in advance.

Processing time:

Authorization validation and tokenization typically complete within 1–3 business days.

Recurring notice:

Notify payer of recurring charges per contract terms and card network rules.

Revocation notice:

Require any revocation requests in writing and allow a reasonable processing window.

Retention requirement:

Keep signed records long enough to support tax, audit, or dispute needs.

Common mistakes to avoid when preparing payment authorizations

Vague payment terms that omit amount, dates, or frequency, making enforcement difficult and increasing disputes.
Collecting full PAN in unsecured fields instead of tokenizing creates PCI scope and security risk for the organization.
Failing to document the revocation process and contact point, causing confusion when a payer withdraws consent.
Relying on weak signer authentication for high‑value or recurring authorizations without following enhanced verification methods.

Consequences of an incomplete or incorrect authorization

Chargebacks: Higher dispute likelihood

Regulatory risk: Compliance violations or fines

Refunds: Forced returns or reimbursements

Reputational harm: Customer trust loss

Contract invalidity: Authorization may be unenforceable

PCI exposure: Additional security obligations

Real-world examples of payment authorizations in use

Two scenarios show how organizations adapt authorizations to specific workflows and compliance needs.

Optica Ventures — recurring rent

Optica implemented electronic authorizations for monthly rent collection to reduce late payments and manual posting.

The form included ACH consent, tenant identity checks, and a revocation clause.
Resulting process created a clear audit trail that simplified reconciliation, reduced returned payments, and provided documented consent for every tenancy without in‑person signing.

Martin Properties — escrow disbursements

Martin Properties used signed authorizations to permit escrow release for repairs and vendor payments.

They combined eSignature with identity verification and invoice attachment.
This approach shortened approval cycles, eliminated paper routing delays, and ensured each disbursement had a dated, signed authorization tied to supporting invoices.

Pricing and basic capability comparison for eSignature providers

Basic starting prices and feature availability for common eSignature vendors to help evaluate suitability for Payment Authorization Act workflows.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	Yes, 7-day trial	Yes	Yes	Yes	Yes
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

FAQs and troubleshooting for Payment Authorization Act completion

Answers to common questions about validity, signatures, revocation, and recordkeeping for payment authorizations.

Need help? Contact support

Is an eSigned authorization valid?
Yes. Under the ESIGN Act (15 U.S.C. ch. 96) and UETA (where adopted), electronic signatures meet signature requirements if intent, consent, attribution, and retention are satisfied.
When is notarization required?
Most payment authorizations do not require notarization; if a specific state or counterparty requires notarization, follow that requirement or use remote online notarization where permitted.
How can a payer revoke authorization?
Include clear revocation instructions in the form; revocation typically requires written notice and a reasonable processing window to stop future charges.
What happens after a chargeback?
Provide the signed authorization and audit trail to the processor or bank; clear authorization language and evidence of consent improve dispute outcomes.
How long should records be kept?
Retain signed authorizations to meet tax, audit, and industry rules—commonly at least 3 years; healthcare records may require 6 years under HIPAA (45 CFR §164.530(j)).
Can I collect full card numbers?
Avoid storing full PANs unless you meet PCI DSS obligations; use tokenization or secure vaulting to reduce scope and liability.

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