How do I revoke authorization?

To revoke, follow the cancellation procedure specified in the authorization (often written notice with a set notice period). Also notify your bank to stop future debits and keep confirmation of the revocation for your records.

Is an electronic signature valid?

Yes. Electronic signatures are valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states provided intent, consent, attribution, and retention requirements are met.

Do I need a notarized PAD?

Not typically for standard ACH authorizations, but some contracts or state rules may require notarization; verify local requirements before collecting notarized signatures.

What happens on a returned debit?

If a debit is returned, the payee should follow its returned-item procedures, notify the payer, and correct the banking details; repeated returns can lead to service suspension or collection actions.

How long should I keep records?

Retain signed authorizations while active and for at least three years after termination; healthcare-related PADs may require six years under HIPAA rules.

Can I collect bank details securely online?

Yes, provided you use secure, PCI-aware capture methods, encrypt stored data, and limit access. Use platforms that support masked fields and encrypted storage for account numbers.

Electronic Signature
Templates
Finance
Pre-Authorized Debit Authorization

Pre-Authorized Debit Authorization

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

PRE-AUTHORIZED DEBIT AUTHORIZATION

Payee (Merchant) Information

Payee Name Payee Address

Payee Phone

Payee Email

Payee Account / Customer ID

Payer (Account Holder) Information

Full Legal Name Payer Address

Phone

Email

Payer Customer / Reference

Bank Account Information (Account to be Debited)

Account Holder Name (as shown at bank) Bank Name

Transit / Branch Number

Institution Number

Account Number

Account Type: Chequing Savings Other

Additional Bank Instructions / Notes (optional)

Authorization and Payment Instructions

I authorize: to debit the bank account identified above for payments as specified below and to credit such amounts to the payee's account. This authorization remains in effect until revoked in writing in accordance with the cancellation provisions below.

Payment Type: One-time Recurring

Amount

Frequency

Start Date

End Date or Termination: Continue until revoked by me/us

Maximum Amount Authorized (optional)

Terms, Representations and Acknowledgements

By signing this authorization, the account holder represents and warrants that they are an authorized signer on the bank account specified and that all information provided is true and accurate. The account holder authorizes the payee and the financial institution to debit entries to the specified account in accordance with the instructions above.

The account holder acknowledges that the payee will provide notice of any changes to the amount, date, or frequency of pre-authorized debits in advance of the next scheduled debit in accordance with the payee's internal policies. The account holder may revoke this authorization at any time by providing written notice to the payee at least 10 days prior to the next scheduled debit; revocation does not affect debits already processed or debits initiated prior to receipt of revocation.

The account holder understands that disputes regarding a debit must be reported to the payee as soon as reasonably possible. The financial institution's liability is limited to processing debits in accordance with this written authorization; the account holder agrees to indemnify and hold harmless the financial institution and the payee for errors resulting from incorrect information provided by the account holder.

The account holder agrees that any returned item, insufficient funds, or other bank fees incurred as a result of this authorization may be charged to the account holder and that the payee may terminate PAD privileges for repeated returned items after notice.

Consent (check to confirm)

I confirm that I have read and understood the terms above and authorize the payee to debit my account as specified.

Notes / Special Instructions

Documentation

The payee may require a void cheque or bank confirmation to verify account details. The account holder agrees to provide, upon request, sufficient documentation to validate the account information provided in this form.

Authorization Signature

Printed Name:

Signature:

Date:

What a Pre-Authorized Debit Authorization Is and How It Works

A Pre-Authorized Debit Authorization (PAD Authorization) is a written consent that permits a payee or service provider to withdraw funds directly from a payer's bank account on scheduled dates or on demand within agreed parameters. It documents the payer's bank details, authorization limits, frequency, and effective dates, and provides contact and dispute-remediation instructions. For recurring payments, a completed PAD Authorization forms the primary record of consent required by banks, payment processors, and many billing systems to initiate Automated Clearing House (ACH) or other bank-to-bank debits.

Why businesses and customers use a PAD Authorization

A PAD Authorization creates a clear, auditable record of consent for recurring or one-time bank debits, reducing billing disputes and failed collections.

Who completes and signs a PAD Authorization

Organizations and individuals that rely on scheduled or customer-authorized bank debits commonly use PAD Authorizations.

Banks and payment processors verifying consumer consent for ACH debits and facilitating returns
Subscription and utilities providers collecting recurring payments from customers' checking accounts
Employers, insurers, or lenders collecting recurring premiums, contributions, or repayments

The document should be completed by the payer or an authorized signer for the payer, and retained by the payee for audit and dispute resolution.

Core elements to include in a professional PAD Authorization

A well-drafted authorization is concise but comprehensive: it identifies parties, specifies bank details, sets payment terms, records consent and effective dates, and includes a clear cancellation procedure.

Parties

Full legal names of the payer (account holder) and the payee (recipient) to avoid ambiguity and to match bank records for authorization verification.

Bank details

Routing number and account number plus account type (checking/savings) and, if required, a preprinted voided check or bank letter to confirm account ownership.

Payment schedule

Frequency (weekly, monthly, on-demand), amount (fixed or variable), and specific date(s) of withdrawal to set clear expectations for debits.

Authorization scope

Statement of consent describing whether debits are single, recurring, or for variable amounts, and any dollar limits or caps on withdrawals.

Cancellation procedure

How the payer may revoke authorization (written notice, notice period, address/email) and any timelines for processing revocations.

Recordkeeping

Signature, date, and a statement acknowledging the payer received required disclosures, enabling audit trails and dispute resolution.

Essential information fields on the authorization

Payer Name: Full name

Account Number: Numeric value

Routing Number: 9-digit ABA

Account Type: Checking or savings

Payment Amount: Fixed or formula

Effective Date: MM/DD/YYYY

Step-by-step: Completing a PAD Authorization

Follow a consistent sequence to collect accurate data, obtain valid consent, and store the record for audits and dispute handling.

01

Collect payer details: Record full name, address, and phone.
02

Capture bank info: Enter ABA routing and account numbers.
03

Specify terms: Define amount, frequency, and start date.
04

Obtain signature: Signer signs and dates the form.

How to configure an online PAD Authorization workflow

Use these configuration elements for consistent digital collection and automated routing of authorizations.

Field	Configuration
Payer verification	Email or SMS code
Bank detail capture	Masked input and validation
Signature method	Electronic signature field
Storage	Encrypted audit trail

Technical considerations for eSigning and eSubmission

Choose a platform that supports secure capture of bank details, strong signer authentication, and auditable records.

Authentication: Email, SMS, or multi-factor
Data formats: PDF, DOCX support
Integrations: CRMs and payment processors

Where to send or store a completed authorization

A completed PAD Authorization should be delivered to the payee's collections system, stored securely, and made available for bank verification or payer requests.

Payee records: Upload to billing system
Bank verification: Provide on request to bank
Customer copy: Send signed copy to payer
Audit archive: Retain encrypted record

Timing, cancellation windows, and notice expectations

Be explicit about effective dates, lead times for cancellations, and how soon debits will begin after authorization to avoid disputes.

Effective date:

Date specified on form; debits begin thereafter

Notice for cancellation:

Specify required notice period (commonly 3–30 days)

Bank processing time:

ACH debits usually settle in 1–3 business days

Return window:

Banks accept unauthorized debit claims per bank rules

Record retention:

Keep signed authorization until after disputes resolve

Common errors that delay or invalidate authorizations

Entering an incorrect routing or account number often causes returned payments and collection delays; verify numbers against a voided check or bank letter.
Using an unauthorized signer or failing to confirm account-holder consent can lead to chargebacks, bank reversals, and legal disputes.
Missing or vague payment frequency and amount details create ambiguity and increase the risk of payer complaints or regulatory scrutiny.
Failing to provide cancellation instructions or required consumer disclosures may breach ESIGN consumer-consent requirements for financial transactions.

Consequences of improper or incomplete PAD Authorizations

Chargebacks: Funds reversed by bank

Regulatory fines: Penalties under banking rules

Reputational risk: Customer complaints increase

Collection delays: Payments returned or delayed

Contract disputes: Claims over authorization validity

Operational cost: Additional reconciliation work

Sample eSignature vendor comparison for PAD Authorizations

Basic pricing and capability differences among common eSignature providers. signNow is listed first per vendor comparison conventions.

	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	7-day free trial	Varies	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently asked questions about PAD Authorizations

Answers to common execution, revocation, dispute, and storage questions for PAD Authorizations.

Need help? Contact support

How do I revoke authorization?
To revoke, follow the cancellation procedure specified in the authorization (often written notice with a set notice period). Also notify your bank to stop future debits and keep confirmation of the revocation for your records.
Is an electronic signature valid?
Yes. Electronic signatures are valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states provided intent, consent, attribution, and retention requirements are met.
Do I need a notarized PAD?
Not typically for standard ACH authorizations, but some contracts or state rules may require notarization; verify local requirements before collecting notarized signatures.
What happens on a returned debit?
If a debit is returned, the payee should follow its returned-item procedures, notify the payer, and correct the banking details; repeated returns can lead to service suspension or collection actions.
How long should I keep records?
Retain signed authorizations while active and for at least three years after termination; healthcare-related PADs may require six years under HIPAA rules.
Can I collect bank details securely online?
Yes, provided you use secure, PCI-aware capture methods, encrypt stored data, and limit access. Use platforms that support masked fields and encrypted storage for account numbers.

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