Getting Permission to Debit or Credit Your
Customers’ Accounts

To debit or credit your customers’ accounts you will need to know their bank, branch and account numbers. To ensure you get the correct information, use an authorization form.

The process of getting authorization varies slightly for Canadian or US banks. Canadian banks require a Payor’s Authorization Agreement for debits only. For credit payments you must ensure that the correct banking information is received from your customers. American banks require a Debit Authorization Agreement (for collecting payments) or a Credit Authorization Agreement (for making payments).

Creating a Canadian Payor’s Authorization Agreement

To collect CAD or USD payments from Canadian accounts you will need a Payor's Authorization Agreement. Your customer’s bank could request a copy of this document. Your RBC Royal Bank Account Manager can review and provide guidance in your development of this agreement. You must keep the Authorization Agreement for a minimum of 12 months for every ACH Direct Payment/Pre-authorized Debit following the cancelling of the authorization.

More information on creating this agreement is available through the Internet at the Payments Canada: Rule H1 - Pre-Authorized Debits (PADs).

Creating an American Debit or Credit Authorization Agreement

An American Debit or Credit Authorization Agreement is used to get your customer’s permission to Debit or Credit their account and gives their U.S. bank permission to accept and post entries to the account.

Your customer must receive a copy of the authorization. You must keep the Debit or Credit Authorization Agreements for 2 years following the cancelling of the authorization.

See Sample Debit and Credit Authorization Agreements

The agreement should include the following items:

  • Your company name and ID number
  • Customer name
  • U.S. Institution routing number (available on Cheques or Sharedrafts)
  • Customer account number
  • Type of account (savings or chequing)
  • Customer Signature
  • Date
To obtain American account numbers you can use the on-U.S. field of the MICR line on cheques and sharedrafts.

The agreement must also include three important statements:

  • A statement authorizing the originator to initiate debit or credit entries
  • A statement authorizing the receiving financial institution to accept and post them
  • A statement that explains to the customer how to cancel the authorization
Cancellations should be given in writing and should take into account that RBC Royal Bank requires sufficient lead time to withdraw the payment instruction.