Childcare tuition is the opposite of retail. The amounts are large, the payments are few, the schedule is fixed, and almost every family pays the same amount on the same day each month. That shape makes the percentage-based pricing built for card sales a poor fit: a percentage of a $1,000 tuition payment is real money, taken every month, for a payment that was never at risk of not being requested. The cheaper channel for this shape is pre-authorized debit — and the real decision is not PAD versus cards in the abstract, but what each channel costs a specific centre, what it obliges the centre to do, and who is allowed to be charged for it.
This guide works that decision on dated Canadian pricing checked on 2026-10-18. Every rate is named with its source. The worked example is an illustration from published rates, not a quote — a centre's family count and tuition level will move the totals, but not the shape of the gap.
Why childcare payments cost differently: big amounts, few payments, no walk-ins
Three features drive the bill. First, the average payment is high. A flat per-transaction fee that would be punitive at a $15 retail ticket is trivial against $1,000 of tuition, while a percentage fee does the opposite: it scales with the tuition and never stops. Collection pricing for childcare should be compared per family per month, not as a headline rate.
Second, the payment is recurring and predictable. There is no card to present, no terminal to rent, and no reason for the collection method to price in walk-in retail risk. Pre-authorized debit exists for exactly this shape: an authorized pull from a parent's bank account on an agreed schedule, settled through Canada's banking network.
Third, the alternatives parents default to are expensive in staff time rather than fees. Cheques require receiving, depositing, and matching to parent accounts, and e-transfers still require staff to match each payment to an invoice and follow up late senders — the administrative pattern a Canadian childcare accounting practice describes when it recommends PAD over both. A collection method that looks free on a fee schedule can be the most expensive one on a payroll schedule.
The collection options on the table, checked 2026-10-18
| Option | Published cost | Cost on one $1,000 tuition payment | Notes |
|---|---|---|---|
| Rotessa (PAD processor) | $25/mo + $0.50 per transaction (1–500 transactions) | $0.50, plus the shared monthly fee | All features across tiers; nothing charged in a month with no processing (checked 2026-10-14) |
| Bank PAD service | Typically around $0.50 per transaction, varying by institution | Around $0.50 | Set up through the centre's bank cash-management or commercial banking channel |
| Childcare app payments (PAD) | Typically around $0.50 per transaction | Around $0.50 | Apps named in the source include Lillio and Brightwheel; accounting integration differs by app |
| Credit card via Stripe (online) | 2.9% + CA$0.30 domestic | $29.30 | The convenience option — priced per payment, every month |
| Credit card via Square (online) | 2.8% + 30¢ | $28.30 | Flat-rate alternative for card-paying families |
| GoCardless (bank debit) | 1% per transaction headline | $10.00 before any cap | Checked 2026-10-14; the cap is region-specific and the Canada cap was not verified, so it is named here but excluded from the totals below |
One rule changes how the card rows should be read. ChildcareCPA states that centres enrolled in CWELCC cannot charge parents extra for credit card processing fees, so accepting cards cuts into centre revenue by the card percentage — given there as 2.9% to 3.5%. A centre in that program cannot solve the card cost by passing it to the families who choose cards; it either absorbs the percentage on every card payment or steers its default collection method to PAD and treats cards as the exception.
Worked math: one centre, 80 families, $1,000 a month
The illustration: 80 families each paying $1,000 a month in tuition — $80,000 a month collected in 80 payments. Collection costs only; software subscriptions beyond the stated PAD fee, and taxes, are excluded.
Credit cards via Stripe: $80,000 × 2.9% = $2,320.00, plus 80 × $0.30 = $24.00. Month: $2,344.00.
Credit cards via Square online: $80,000 × 2.8% = $2,240.00, plus 80 × 30¢ = $24.00. Month: $2,264.00.
PAD via Rotessa: $25.00 monthly fee, plus 80 × $0.50 = $40.00. Month: $65.00.
Bank PAD at the typical figure: 80 × around $0.50 = around $40.00, before any account or cash-management fees the bank applies, which vary by institution.
The gap: roughly $2,200 to $2,280 a month — about $26,000 a year — between collecting the same tuition by card and collecting it by PAD. Even if a centre keeps cards available for a minority of families, every family moved to PAD removes about $28 to $29 a month of card cost and replaces it with about $0.50.
Read the gap with the CWELCC rule in mind. For an enrolled centre, the card total is not a cost that can be itemized back to parents; it is a direct reduction of tuition revenue. For a centre outside the program, passing card costs on is still a policy and relationship decision governed by card-network and provincial rules — the arithmetic above is the size of the decision either way.
What PAD obliges the centre to do
PAD is cheap because it runs on authorization and rules, not on card-network guarantees. Payments Canada's business guidance for PAD sets the working obligations. The centre needs a payor's PAD agreement with each family, specifying the schedule and terms. Where payments are at set intervals, the centre must notify the family at least 10 calendar days before changing the amount, unless the agreement specifically allows the change or the family agrees to reduce or waive the notice period — a rule that belongs on the calendar beside every September tuition adjustment and every subsidy-related change.
Cancellation and recourse run the other way as well. A family can cancel its PAD agreement under its terms; where the agreement does not address payee cancellation, Payments Canada describes notice requirements including at least 30 calendar days written notice before a payee stops issuing PADs. And if a withdrawal is not in accordance with the agreement, a parent can seek reimbursement through their financial institution — for personal PADs, up to 90 days after the withdrawal. None of this is a reason to avoid PAD. It is a reason to keep agreements, notices, and amount changes documented as carefully as the fees are counted, because a reversed tuition payment costs more than the $0.50 the channel saved.
Settlement timing also differs from cards. Rotessa's PAD guidance describes funds settling a few business days after the process date, with payment instructions sent in advance. A centre moving from cards should set its debit date a few days ahead of payroll and rent obligations rather than assuming card-style timing.
Decision framework: choosing a collection method
- Make PAD the default at enrolment, with the agreement signed alongside the other intake forms. Retrofitting PAD onto families habituated to e-transfer is the slow path.
- Price cards honestly as the exception. Use the worked-math method on the centre's own family count: each card-paying family costs roughly $28 to $29 a month at published online rates on $1,000 of tuition.
- Check the CWELCC position before offering a card surcharge or convenience fee. On the source cited here, enrolled centres cannot charge parents extra for card processing.
- Build the notice calendar: at least 10 calendar days notice before an amount change at set intervals, documented agreements retained, and a clear cancellation path for withdrawing families.
- Compare PAD providers on more than the 50 cents: monthly fee, whether idle months are charged, accounting integration — the source notes Brightwheel integrates with QuickBooks Online while Lillio does not integrate directly — and how failed or returned debits are reported.
A note on steps: this is a pricing and decision guide, not a how-to procedure, so the framework above is the actionable part rather than a numbered fix.
Disclaimer: general information about payment collection costs only — not financial, accounting, legal, or childcare business advice, and not a statement of any program's current terms. Rates and rules were checked on 2026-10-18 from the sources named in the article (Rotessa and GoCardless pricing as last checked on 2026-10-14) and can change; confirm current pricing, program rules, and PAD obligations before acting.
FAQ
How much does a centre actually save by moving tuition to PAD?
On the worked example — 80 families at $1,000 — about $2,200 to $2,280 a month against published online card rates, or roughly $26,000 a year. The saving scales with tuition and family count because the card cost is a percentage and the PAD cost is a flat fee per payment.
Can an enrolled CWELCC centre pass the card fee to parents who pay by card?
ChildcareCPA states that centres enrolled in CWELCC cannot charge parents extra for credit card processing fees, and that accepting cards therefore cuts into revenue by 2.9% to 3.5%. Confirm the centre's current program terms before setting any fee policy.
What notice does a centre owe before a tuition amount changes on PAD?
Payments Canada's business guidance: where payments are at set intervals, at least 10 calendar days notice before the change in amount, unless the PAD agreement specifically allows the change or the family agrees to reduce or waive the notice period.
Why not just keep taking e-transfers, which have no processing percentage?
Because the cost moves to staff time: e-transfers still require matching each payment to an invoice and following up late senders, while PAD pulls on schedule under a signed agreement and automates much of the matching. The comparison is payroll time against about $0.50 per payment, not percentage against zero.