Pre-authorized debit (PAD)
A payment you've authorized a company to automatically withdraw from your bank account on a recurring basis.
Last reviewed July 19, 2026
Reviewed for accuracy and clarity by Sandeep Singh before publication. Learn about our editorial process.
What it means
A pre-authorized debit is a payment — rent, a gym membership, a phone bill, an insurance premium — that a company is authorized to withdraw directly from your bank account, usually on a recurring schedule, without you having to manually approve each one.
Why it matters
If a PAD fails due to insufficient funds, some merchants automatically resubmit the same charge days later. Each failed attempt can potentially trigger its own NSF fee, which is exactly the pattern behind several recent Canadian bank class action settlements.
Common misunderstandings
- You generally can't control whether or when a merchant chooses to resubmit a failed PAD — that decision sits with the merchant's payment processor, not your bank.
- Cancelling a PAD with your bank and cancelling the underlying agreement with the merchant are two different things — both may be needed to actually stop the charges.
Where you'll see it
In the fine print of recurring billing agreements, and on a bank statement as a recurring withdrawal.
Related terms
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