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Pre-Authorized Recurring Payments
Pre-Authorized Recurring Payments (PRPs) on commercial cards have grown in popularity due to their convenience and ease of use. Examples of services that can make use of PRPs include journal and magazine subscriptions, wireless communication provider payments for blackberry, cell phone and pager and club/organization dues. However, before your company decides to take advantage of this useful tool on your company's commercial cards, it's important to be aware of a few facts:
- Once a company or individual cardholder completes a Pre-Authorized Recurring Payments form, you have authorized the supplier to complete specified charges for the term of the contract.
- When you cancel an employee's card prior to the end of a contract term, any existing PRPs will continue to flow to that card account number. By canceling the card, you have only prevented the authorization of new PRP agreements and purchases.
- To stop existing PRPs from appearing on a cancelled card, you must contact the supplier and revoke your authorization. At that time, the supplier should stop the charges. If they do not, then you can dispute any charges that take place after you revoke authorization using the normal dispute process.
PRPs are a convenient way of paying for recurring charges. However, as a best practice for getting the most from PRPs, be sure to carefully monitor any PRP agreements made by your employees and always contact your suppliers to discontinue a PRP when you cancel or change a card.
If you have any questions about PRPs please contact your Scotiabank Program Manager or email us at commercialcard@scotiabank.com
This article is published or provided by Scotiabank to keep our customers and friends informed of new and important banking news, issues and practices. This article is not intended to provide legal, accounting or taxation advice as individual situations will differ. Prior to implementation, any practices or procedures should be discussed with your lawyer, accountant, business advisor and security consultant.