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Additional Information Requested When Setting Up Clients

In a continuous effort to know our customers and prevent fraud, the Client Information Form now requests batch and entry limits on your clients' payrolls. The deadline for accepting outdated Client Information Forms is October 31st

Why are we asking for this?

This information is critical in aiding Kotapay in fraud prevention and enhances compliance with Know Your Customer regulations. Transactions that are over the limit are flagged for review by our Fraud Analytics Department. If determined that they are fraudulent, they will not be processed.

To ensure you have the most up-to-date version of the agreements, we ask that you always download agreements from the website or use e-contracts. These are always available under Documentation > Agreements. Thank you for your cooperation.

Upcoming Holiday Hours and Non-Processing Days


Monday, October 14th is Columbus Day is a non-processing holiday as the Federal Reserve Banks will be closed. ACH transactions cannot be dated for October 14th. To avoid additional charges, please allow an extra day for processing.

Please ensure that your files contain the correct SEC Codes.

SEC codes are part of the Nacha file format that help identify transactions. It is very important that the correct SEC Codes are used, as this directly affects the return timeframes involved, and can be a Nacha Rules Violation if not used correctly. Please take the time to ensure that your transactions are coded correctly. As a reminder:

  • When depositing to a Company/Corporate Account, the correct SEC code is CCD
  • When depositing to a Consumer/Individual Account, the correct SEC code is PPD

These formatting rules are created by Nacha to help the funds flow and be tracked effectively. Failure to comply may result in additional fees.

Payroll Processing for CBD and Hemp

Kotapay is now able to process payrolls for companies in these industries, as long as the necessary regulatory licensing is provided to Kotapay. This includes the license to grow, license to sell, product testing results evidencing a legal level of THC of less than 0.3%, or any other applicable regulatory requirements.

What to know about impounding client funds

Money transmitter licensing and regulation have become a hot topic within the payroll industry. The language within the 2018 enforcement actions implies that if a payroll processor is impounding any client funds, for any period of time and for any reason, they may be subject to money transmitter licensing requirements.

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Financial Institutions are exempt from money transmitter regulations, therefore, as a division of First International Bank & Trust, Kotapay is uniquely positioned to facilitate these transactions. Kotapay will set up a For Benefit Of (FBO) bank account in which you, the processor, is removed from having ownership of client funds. These funds are held in an account owned by Kotapay until payment instructions are sent. Contact a member of the Sales Team to learn more or click here.

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Add a Pay-Now Button to Your Website

Kotapay will design and build a custom payment portal to allow you to accept credit card or ACH payments via your website. Get started!


Prevent Fraud by Knowing Your Customer


It seems almost daily that you’re reading about another instance of payment fraud or a data breach. What can you do to protect yourself and your company? One of the biggest fraud prevention tools is to know your customer and know who you’re doing business with.

What information are you collecting from your clients?

A few recommended items to collect from your clients to ensure you’re doing business with a legitimate company:

  • Physical address of the owner(s)
  • Date of birth and SSN
  • A copy of government issued ID

Be diligent about protecting your business! Click here to learn more.