Frequently Asked Questions (FAQs) about Tipalti Payables Automation

Tipalti is a global payment automation system and accounts payable software 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.

Payment remittance is certainly a core function to Tipalti’s solution, allowing mass payments to be made out to payees across 196 countries. However, Tipalti also streamlines the entire payment management process for companies from payee registration through to invoice processing, 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 / 1042-S 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.

A payee is the person receiving funds and the payer is the one paying out to the payee. Depending on industry, terminology may vary:

PAYER INDUSTRY

• Traditional Accounts Payable
• Ad Networks
• Affiliate Networks
• Monetisation Networks
• Crowdsourcing Networks
• Marketplaces (Online)
• Translation Networks
• Learning Networks

PAYEE

• Suppliers / Vendors
• Publishers / Site Owners
• Affiliates / Referral Partners
• Publishers / Content Owners / App or Game Developers / Licensors / Artists / Producers
• Contributors / Freelancers / Gig Workers / 1099 Contractors
• Partners / Suppliers / Vendors
• Translators
• Educators / Contributors

Tipalti can pay in the local currency of over 196 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.

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.

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, see the payment method reference.

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.

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.

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.

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 invoice processing, payment reconciliation reporting, onboarding payees, and streamlining communication issues.

Tipalti is strictly an accounts payable automation platform and is focused exclusively on resolving the pain of payments out to partners, suppliers, and vendors.

“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.

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.

All payees utilising 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), Anti-Terror, and Anti-Narcotics compliance.

Tipalti has a risk module called Detect to help identify suspicious payees. They are flagged within the system and includes the situations where the transaction was deemed risky.

Tipalti collects all the necessary contact and banking information from the payee in our payee registration IFRAME web interface or supplier portal 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.

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 without 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.

Yes – at any time. Those changes will go into effect during the next upcoming payment run.

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-8 series form submission. For businesses and payees that require VAT identification, upload capabilities are provided. Note that this can include fully digitized data, not just a PDF upload of a tax form.

W-8 series forms are required to establish the nature of the payee’s tax status according to the Internal Revenue Department. Various rules apply.

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 and 1042-S reporting requirements.

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.

Payers can determine which payment methods are available to their payees. We recommend taking advantage of the multiple payment options that Tipalti makes available to expand your reach into new markets. It also exudes goodwill to partners enabling them to choose the best option for their situation. Note that some geographies will naturally limit what methods are available. You don’t have to know which – Tipalti knows!

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.

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. In addition, there is time required to customize any supplier-facing portals and emails, as well as workflow and signatory rights.

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.

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.

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.

Payments are uploaded to Tipalti through a simple payment file, usually generated from your accounting department. Payments may also be triggered through an ERP integration or from the Invoice Management module. Once queued up in Tipalti, they can be cancelled if necessary. Payment runs are set to run 8AM Eastern Time.

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.

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 authorised for payment by the relevant dashboard user/s.

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.

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 supplier portal.

No. All payments must be funded.

Payment processing depends on a variety of factors including: payment method type, foreign exchange conversions, and the individual payee’s banking system.

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.

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.

Tipalti provides a year-end submission-ready file that can be imported into your corporate accounting or tax preparation package to generate individual tax reports.

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.

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.

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.

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.

The supplier portal is likewise secured in the same way.

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.

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.

Tipalti receives and maintains a third-party audit certification for AICPA SSAE 16 SOC and ISAE 3402 Type II. Adhering to these prescribed processes allows us to work with major corporations, including our worldwide banking partners.

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.

Tipalti is a multi-tenant platform running 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 ensure optimal performance and security. We’re happy to discuss an SLA program for your business.

As an authorised e-money institution (“EMI”) in the UK, Tipalti Europe Ltd (“Tipalti EU”) must comply with the safeguarding requirement, a regulatory scheme to protect customers’ funds that are received by Tipalti EU for the provision of payment or e-money services.

Under the safeguarding obligation, Tipalti EU is required to place all funds that are received in exchange for e-money in a separate account from Tipalti EU’s own accounts. We have to keep customers’ funds segregated from Tipalti EU’s own funds. The funds are held in a designated account that is named “safeguarding account” with an authorised bank.

Thus, if Tipalti EU becomes insolvent, customers’ funds are protected and they will not suffer losses. By placing customers’ funds in a separate account, it will be easier to identify their funds and to pay them back in priority to all other creditors.

Client funds are also protected from any interest in, recourse against, or right of set-off from the financial institution where Tipalti holds Client funds.

Some costs could be deducted by the administrator or liquidator of the Firm during the insolvency process.

The Firm regularly carries out internal and external audits to demonstrate that it is safeguarding Client funds in compliance with applicable regulations in the UK.

Clients can contact Tipalti or check the FCA website (https://www.fca.org.uk/consumers/using-payment-service-providers) for further information.

Tipalti EU holds customers’ safeguarded accounts with an authorised UK bank, Citi Bank London. We have 11 safeguarded accounts in 11 currencies: GBP, EUR, USD, DKK, PLN, CHF, SEK, AUD, JPY, CAD and SGD.

Tipalti EU does not safeguard customers’ funds itself. According to Electronic Money Regulations 2011, only authorised banks and credit institutions from an OECD country can provide safeguarding accounts.

Since Tipalti EU is neither a bank nor a credit institution we cannot offer safeguarding accounts services to our customers.

We only safeguard funds for customers we have contractual relationships with. Since we are prohibited from providing safeguarding accounts as a service to customers, we cannot safeguard funds on behalf of a third party (a client/supplier of our customers). Our customers cannot tell their suppliers that the suppliers’ funds are safeguarded with Tipalti EU.

No. FSCS is a protection scheme that is provided by banks to their customers. Tipalti EU is an EMI and not a bank and, therefore, does not provide FSCS protection to customers.

The main difference between safeguarding and FSCS is the level of protection that customers get. Under the safeguarding requirement, customer funds are fully protected and in a case of insolvency, they will be entitled to get all of their sums returned. While under FSCS the maximum protection is up to £85,000.