Why do I need a global payment automation system?
When a company must make high volumes of payments to payees, manual effort can take you so far. It is error prone and not scalable.
The time required to manage this entire payment process can be a significant drag on productivity. The average AP department spends more than five hours a week handling this process.
When paying partners, it’s also critical that tax and regulatory compliance is taken care of and that payments can be made in a timely, accurate way to your partners. Furthermore, when companies add foreign partners and suppliers, this add significantly more accounting and operational complexity to the mix, making a global payment automation system even more valuable. That’s because there are a multitude of payment options, including payment methods, tax implications, and currency, that should be localized for that specific partner.
A global payment solution like Tipalti enables companies to centralize and execute all payment processes for all partners, regardless of jurisdiction. In addition, the business can maintain records for reconciliation in one place.
What is Tipalti?
Tipalti is a global partner payment automation system to manage, execute and reconcile the entire process of making outbound payments to partners and suppliers. If you currently need to pay a hundred or more payees routinely, including across international borders, there is no system more global, powerful or comprehensive. Tipalti eliminates over 80% of the workload required to manage payments, while ensuring tax and regulatory compliance, and improving the partner payment experience.
Does Tipalti only remit payments?
Payment remittance is certainly a core function to Tipalti’s solution, allowing mass payments to be made out to payees across 190 countries. However, Tipalti also streamlines the entire payment management process for companies from payee registration through to tax and regulatory compliance, remittance, payment issue resolution, fraud risk mitigation, and payment reconciliation and payee reporting.
The system handles all payment tax and regulatory compliance requirements, including tax form collection, 1099 processing, and ensuring that all payees are not on any international anti-terrorism, anti-drug trafficking, and anti-money laundering watch lists prior to payments being made. Tipalti also enhances the partner payment experience to help you better attract and retain partners by offering them choice of different payment method and currency and by improving payment timeliness and accuracy results.
What is a Payee? What is a Payer?
A payee is the person receiving funds and the payer is the one paying out to the payee. Depending on industry, terminology may vary:
|Traditional Accounts Payable||Suppliers / Vendors|
|Ad Networks||Publishers / Site Owners|
|Affiliate Networks||Affiliates / Referral Partners|
|Monetization Networks||Publishers / Content Owners / App or Game Developers / Licensors / Artists / Producers|
|Crowdsourcing Networks||Contributors / Freelancers / Gig Workers / 1099 Contractors|
|Marketplaces (Online)||Partners / Suppliers / Vendors|
|Learning Networks||Educators / Contributors|
Which currencies does Tipalti support paying out to?
Tipalti can pay in the local currency of over 190 countries. Sending in local currency can improve the experience for payees since it offers the additional convenience of ready-to-use funds when receiving payments, without the hassle or fees involved with going to a bank to convert US dollars in to local funds.
What payment methods are available?
Depending on country, Tipalti supports a variety of payment methods and is always adding more options. These include ACH (automated clearinghouse), wire transfer, Global ACH (eCheck), PayPal, prepaid debit cards, and live paper check. While payers can determine which methods are made available, the advantage for the payee is that they can choose a payment method that works best for them.
What are the benefits or tradeoffs of using one payment method over another?
|Payment method||Main Attributes|
|ACH / Direct Deposit||Automated Clearinghouse (ACH) provides an inexpensive electronic money transfer to the payee bank account. It’s available in the US. In some situations, it can take a few days to clear.|
Local Bank Transfer
|Fast and most cost-effective electronic money transfer to the payee bank account. Available in 29 countries.|
|Paper Check||Checks are sent via postal mail and delivery times can be longer. Paper checks are offered in multiple currencies. The reliability of postal service in various countries may be an issue.|
|Wire Transfer||Funds are transferred directly to the payee bank account. One of the fastest and most reliable method. However, the costs are higher.|
|PayPal||Funds are transferred to the payee PayPal account. Contact PayPal for information regarding availability of withdrawals in each country. Even in some countries that PayPal supports, there can be issues receiving funds. Also payees must convert the funds to their local bank for use.|
|Prepaid Debit Cards||No bank account required. Prepaid debit card is loaded remotely and can be used at any location that accepts MasterCard and Visa.|
Why is paying internationally so difficult?
When you have a lot of payees to manage, paying international partners can be challenging. There are many different requirements and regulations (banking, tax, security, etc.) that must be adhered to that differ significantly by country and the rules can change often depending on governmental, technological or other factors. To understand the issues around paying international partners, refer to this white paper.
In fact, Tipalti tracks over 26,000 rules and conditions to ensure that payments are executed legally and flawlessly. For businesses to manage these changing conditions would require a lot of manual effort and a payment compliance expert on staff.
What is SEPA and what are the benefits to my payees?
SEPA (Single Euro Payment Area) is an expansion to the eCheck/Global ACH payment method, enabling payees in all Euro countries to receive direct bank transfers at a much lower cost. In some countries (e.g UK, Sweden) the local currency is supported alongside the Euro.
SEPA payments are supported in the following countries (updated July 2013): Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain, Denmark, Bulgaria, Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania, Sweden, United Kingdom, Iceland, Liechtenstein, Norway, Monaco, Switzerland, Martinique, Guadeloupe, French Guiana, Reunion, Gibraltar, Aland Islands.
How much does Tipalti cost?
Tipalti charges a monthly operational fee to set up and maintain an account. In addition, there are per-transaction charges depending on the payment method and any foreign exchange charges.
Who pays the transaction charges?
Tipalti offers the payer the flexibility to determine whether and how much the payer or payee pays for transactions. Charges can also be based on payment method. For example, you can encourage greater adoption of certain payment methods (such as ACH over wire transfers) by offering to cover the costs of one, and not the other.
Can we keep an existing payment process/method separate from Tipalti?
For businesses wanting to maintain an existing payment process, they can choose to run Tipalti in parallel to support other payments. However, fair warning: Tipalti is so easy to use that you may change your mind about managing a separate workflow once you get started. It happens all the time!
We only make domestic payments. Is Tipalti still a fit?
Tipalti offers a lot of value for those making payments to multiple payees in different countries. However, if the volume of domestic payments is a burden to your accounts payable team, you simply want to streamline and automate a cost center operation, or you want to insert a system that will grow with you if and when you go more global, Tipalti may still be right for you. Several Tipalti customers are domestic only but found considerable value in payment reconciliation reporting, onboarding payees, and streamlining communication issues.
Does Tipalti support pay-in / merchant processes?
Tipalti is strictly a payout automation platform and is focused exclusively on resolving the pain of payments out to partners, suppliers, and vendors.
What does “Tipalti” mean?
“Tipalti” comes from the Hebrew word “טיפלתי”, meaning “I handled it.” It represents the philosophy of the company to handle all aspects of the partner payment process, relieving customers of the burden.
Can anyone use Tipalti?
We can work with most companies, however, because of our relationship with top-tier banking partners, we are required to limit our risk exposure. As such, we are not able to work with businesses in certain industries deemed high-risk and all customers must pass a due diligence approval cycle. For questions about whether your company is a fit, contact our sales team today.
What is the purpose of Tipalti’s AML policy?
Our anti-money-laundering policy ensures that we comply with the Bank Secrecy Act, anti-money laundering laws and related regulations. This ensures we maintain a good standing with our financial partners while helping our customers stay in regulatory compliance for their payee payments.
How does Tipalti verify payee compliance?
All payees utilizing the Tipalti platform are screened against US and international blacklists to avoid payouts to suspected terrorists, money launderers, and drug traffickers to ensure they are not blacklisted for money laundering, terrorism, or other illicit activities. In addition, every transaction is verified even if a payee has passed previous screenings. Tipalti’s database is updated regularly with all the latest regulatory requirements to ensure full OFAC (Office of Foreign Asset Controls), AML, Anti-Terror, and Anti-Narcotics compliance.
Can I identify high-risk payees?
Tipalti has an optional Risk Management Module to help identify suspicious payees. They are flagged within the system and includes the situations where the transaction was deemed risky. This module also identifies payees across the entire Tipalti network so you benefit from fraud checks made by other customers.
Will we need to open an account at another bank?
You can maintain your current corporate banking accounts, however, we require you to fund a virtual account with Tipalti to draft payments. This is a non-interest yielding account dedicated for remittances with Tipalti. You also have the option of opening a limited dedicated bank account in your company name with Tipalti’s banking partner.
Can we choose what payment methods are offered to payees?
Payers can determine which payment methods are available to their payees. We recommend taking advantage of the multiple payment options makes available to expand your reach into new markets. It also exudes good-will to partners enabling them to choose the best options for their situation.
Do we need PayPal Mass-Payment to make payments through Tipalti?
No. Tipalti will process your PayPal payments as either regular transactions or as PayPal Mass-Payment transactions. This is ideal for countries where PayPal Mass-Payment is not available.
How long does it take to implement Tipalti?
Technical implementation is a matter of days. However, the process to collect and review required company business information for due diligence and account setup can take several weeks.
What is the purpose of the IFRAME?
The IFRAME is a brandable web interface that enables payees to provide payment information and receive payment status from Tipalti, within your brand’s own website experience and look and feel. It can be themed to match your existing site and can easily be integrated in to any page of your site (oftentimes a client’s own payee portal) within minimal development work. The IFRAME allows payees to register their contact and banking information. The Tipalti IFRAME also supports secure sites and can be passed parameters to simplify the registration process. A second IFRAME is available for payees to view their transaction history.
We recommend you introduce the IFRAME as part of your normal payee registration process. As such, we can also pre-fill data into the IFRAME to reduce the friction of repeatedly entering known information.
Do you have an API?
Yes. The application programming interface (API) provides programmatic access to all the backend functions available in the payer dashboard and is primarily used to support integration projects.
Do all payees need to register their information?
Tipalti collects all the necessary contact and banking information from the payee in our payee registration IFRAME web interface and ensures that those payees are eligible and legal to be paid in that same process. Payees also select their payment method and choose if they wish to be paid in their local currency at that time and we collect their tax forms (W-9 for US payees, W-8BEN for non-US payees working with US companies, VAT ID specifications for European payees). For businesses with an established payee roster, we can import the information directly into Tipalti to reduce the friction of getting payees onboard.
Will payees know we’re using Tipalti?
The IFRAME portal can be fully custom branded to match the look and feel of your website. All email communication likewise can be branded to match your business and appear to come from your business. All transactions in bank statements will be shown to come from you.
What if we don’t have a website dedicated for payee partners?
The IFRAME portal can be embedded onto any web page. However, if a site is not available, you have the option of using the Tipalti Supplier Portal. It runs w/o an IFRAME and is hosted on our servers. The Supplier Portal also provides more communication options and reporting features for payees to engage the payer.
Can payees change their payment methods?
Yes – at any time. Those changes will go into effect during the next upcoming payment run.
Do you collect tax forms?
For US payees working with US companies, an integrated W-9 form is collected on all taxpayer identifiers: e.g. Social Security numbers (SSN) or Employer Identification numbers (EIN). For non-US payees working with US companies, a workflow is available to facilitate W-8BEN series form submission. For businesses and payees that require VAT identification, upload capabilities are provided.
Do non-US payees need to submit tax forms?
W-8BEN series forms are required to establish the nature of the payee’s tax status according to the Internal Revenue Department. Various rules apply.
What if we have a separate method for collecting payee tax forms?
A payer can override the settings for the payee from the Tipalti payer dashboard so that tax forms are not required. However, we do encourage our customers to utilize our tax identification processes since they will ultimately need to be done and Tipalti helps save the time required to collect and document this tax form issue and streamline 1099 reporting requirements.
Does Tipalti support approval workflows?
Tipalti has role-based access support. This lets your company set rules for which users can view, add, edit, delete information, who can approve payments, and if multiple people are required for payment approval based on various conditions (e.g. payment amount). This enables the entire accounting team to work with Tipalti in a secure way.
How are payment instructions executed?
Payments are uploaded to Tipalti through a simple payment file, usually generated from your accounting department. Once queued up in Tipalti, they can be cancelled if necessary. Payment runs are set to run 8AM Eastern Time.
What are the main issues that can trigger a failure to pay?
Overwhelmingly, the issues are on the payee side, often supplying the wrong information, such as their bank routing information or typing in the wrong email or using a PayPal account that is no longer valid. These exceptions are noted in the payment report on the payer dashboard and then Tipalti can be set up to send auto-generated emails (branded from you) to the payee to collect the required information to resolve the payment issue.
Customers report significant reductions in the payment error rate because of Tipalti. Based on the payee’s country, payment method and currency preferences, Tipalti automatically knows which required fields to collect. The system also includes many field-level algorithms to proactively identify payee data entry errors and notify the payee to correct those errors when found.
Can we stop a payment to a payee?
A payment can be cancelled as long as it is still scheduled to be processed on a future date or if it has not yet been authorized for payment by the relevant dashboard user/s.
Can we set thresholds for paying out?
Yes. You can require that payments reach a certain level before paying. You can also allow your payees to select a higher threshold level than the one set by you.
How many attempts are made to execute a payment?
Tipalti does not re-attempt to make rejected payments. The payee becomes un-payable until they change the details of their payment method, using the Tipalti IFRAME.
Will Tipalti still pay out if we do not have funds in our account?
No. All payments must be funded.
How fast are payments processed?
Payment processing depends on a variety of factors including: payment method type, foreign exchange conversions, and the individual payee’s banking system.
When are payees informed of payments that were made?
Payees are automatically notified when payments are made. In the event of an issue, they are alerted to the problem such as: a payment can’t be made because tax forms have not been completed or payment was rejected by payee bank.
Can we use Tipalti to pay other suppliers?
As long as you have a supplier registered (landlords, utility companies, contractors, etc.), a funded account, and a payment type selected in Tipalti, you can execute payments by including them in your payment file. Several of Tipalti customers have used the platform to streamline their accounts payable processes and reconcile payment issues.
Can we see transaction histories?
You can view the entire history of payments made to individual payees from within the payer dashboard. This includes any exceptions to payment.
Does Tipalti support 1099 reporting?
Tipalti provides a year-end 1099-ready file that can be imported into your corporate accounting or tax preparation package.
How can we prove to a payee that a payment was made?
From the payer dashboard, the Payment Report provides the entire history of payment transactions made and attempted. To provide payees their own view into their transactions, you can implement the Payment List IFRAME.
What reconciliation reporting does Tipalti offer?
Tipalti provides reports required by various disciplines of the organization: Payment Operations, Accounts Payable, Tax Management, Compliance, etc. The Reconciliation Report directly looks at payee transactions made in Tipalti with all connected banking providers including full view into banking providers, currency exchanges, transaction and conversion fees, payee ID and name, etc. It is primarily used for end-of-cycle general ledger reporting.
What recourse do we have if we’ve paid a fraudulent payee?
When an issue arises where a fraudulent payee was able to receive funds from you, we will work with you and the bank to attempt to recover the funds. However, there is a limit to what is possible. This is one reason we encourage our customers to “KYC” (Know Your Customer) when it comes to doing business with any entity.
Is the IFRAME secure?
Both the IFRAME and API utilize industry-standard, enterprise-class security. SSL encryption ensures that information cannot be intercepted. All data collected and stored, including account numbers, Social Security Numbers, and other PII (Personally identifiable information) is SSL encrypted. All calls to the IFRAME and API are protected by encryption keys. The keys are SHA256 encrypted and contain a randomizing component so repeat calls have different keys with a limited lifetime. Keys are obtained using an API call from the Payer to Tipalti. The API call must come from a white-listed IP address. All API calls (including calls to obtain a short term key) are white-listed. All other calls will be denied.
How does Tipalti maintain account access security?
For payees accessing the system, Tipalti utilizes Two-Factor Authentication (TFA): a knowledge factor (the username and password to access the payee dashboard on the payer’s website) with the possession factor (the payee‘s mobile phone to receive a validation PIN).
The payer dashboard utilizes SSL, along with the username and password. In addition, role-based access grants view, create, add, edit, and control permissions accordingly.
Who at Tipalti has access to our account information?
Only approved individuals on Tipalti’s staff have access to any account information for the purposes of administering and troubleshooting. These individuals have undergone background checks and their compensation is tied to successful operations. All account identifiers are masked with visual hashing and stored in the database using SSL encryption.
What certifications does Tipalti maintain?
Tipalti received a third-party audit certification for AICPA SSAE 16 SOC, ISAE 3402 Type II, and is PCI-compliant. Adhering to these prescribed processes allows us to work with major corporations, including our worldwide banking partners.
How often do you back up?
The database is automatically backed-up every 4 hours. The entire system image is backed-up daily and once a week following industry-standard best practices. Restoring the image takes a matter of minutes.
Does Tipalti offer an SLA on uptime?
Tipalti runs on a global, secure, distributed cloud architecture that adheres to SSAE 16 reporting requirements. This fault-tolerant system is highly available and fully redundant to ensures optimal performance and security. We’re happy to discuss an SLA program for your business.