Tipalti is one of those startups that flies under the radar and gets little press, but is growing faster than many other payments companies out there. The startup takes a slightly different approach than the big names to managing global payments for companies. Its SaaS streamlines and automates the way companies make payments to the masses. Basically, this is a solution for any company that is making hundreds of payments at one time, to different payees all over the world.
What makes Tipalti’s offering unique is that is covers all the phases of the pay-out — from payee registration and payment-method selection to funds disbursement — while keeping the payer in full tax and regulatory compliance, which is challenging when paying recipients in different countries. Tipalti’s framework allows companies to pay vendors in 190 countries.
This kind of product is particularly effective for companies with a large number of disbursed payments, such as affiliate networks, ad and monetization networks, publishers and others. With one line of code, these networks can embed Tipalti’s capabilities. When an affiliate or publisher signs up to be paid, a payments tab from Tipalti pops up and asks the payee where and how he or she wants to be paid, what forms they need to fill out and more. In these situations, says co-founder and CEO Chen Amit, payees will often designate varied ways of payments, including check, wire transfer, direct deposit and more. Managing this can be a huge challenge, he adds. Tipalti allows payees to be paid the way they want, and payers to avoid the hassle of dealing with all the regulatory issues and payments challenges.
In terms of the competition, some companies like Google and Microsoft, have developed proprietary tools that rival Tipalti, says Amit. But he believes his software is the best out there, especially with new fraud-management tools the company is releasing today. Tipalti is debuting a database for payers to report suspected fraudsters and anonymously share information with the community.
Amit explains that fraudulent activity in advertising and affiliate networks, app monetization networks, and other e-commerce sites cost network operators hundreds of millions of dollars every year. The most common types of fraud to affect electronic goods networks are click-fraud, the use of stolen payment-method details to purchase goods online, and attempts at money laundering. The database and fraud technology utilizes proprietary algorithms to detect and identify suspicious payees.
Once flagged, Tipalti assigns them a “risk review” status to alert the administrator who can decide to then block or manually review them. Payers can also opt to add suspicious payees to a global network shared among Tipalti mass-payers and to subscribe to automatic alerts when suspected payees try to join their network. Suspended payees aren’t paid until reviewed, while blocked payees aren’t paid at all and are flagged in the global database, alerting other Tipalti customers.
Ben Ishisaki, corporate controller at Tapjoy, says that since using Tipalti, the workload associated with mass payouts has decreased by over 50 percent. Amit tells us that the company has processed close to $1 billion in remittances, and has grown 15-fold over the past year. In terms of funding, Tipalti, which is three years old, has raised a little over $3 million from Oren Zeev, the investor behind Audible, Chegg, Houzz and others.