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Payer PayPal account

To use your own PayPal account to pay payees, you need to add Tipalti credentials to your PayPal business account. Since PayPalADAccount Direct accounts with Tipalti use the your PayPal account, all payments are made in your configured currency. For example, if your PayPal account is funded in EUR, then all the payments are issued in EUR. Any change in currency would need to be completed on the payee's end.

PayPalAD accounts can only pay out in the currency of the payer's Paypal Account. EUR to EUR, GBP to GBP, CAD to CAD, etc. Any FXForeign exchange would happen outside of Tipalti via Paypal.

Tipalti can operate using PayPal's single pay or mass pay system. The main differences are outlined in the table below.

Single pay vs. mass pay

topic

single pay

mass pay
Fees charged by PayPal
  • All fees are charged to the payee.
  • Fees are higher than mass pay.
  • There are no payer fees.
  • All fees are charged to the payer.
  • Fees are lower than single pay.
Funding of transactions
  • PayPal debits the payer's connected bank account or credit card for each transaction.
  • There is no need to prefund the PayPal account.
  • PayPal account must be prefunded to execute transactions.
  • Prefunding can take up to 5 to 10 business days.
Limitation PayPal may freeze the payer account if the payment batch contains more than 10 transactions. None
Payment submission file
  • Payer uploads the payment file to Tipalti.
  • Tipalti parses the file and creates individual payment instructions, which are submitted to PayPal.
  • Payer uploads the payment file to Tipalti.
  • Tipalti parses the file and creates a mass-pay instruction, which is submitted to PayPal.

PayPal account approval

 There is no need for special account approval.
  • Payers need to apply for "Mass payer" status. PayPal selectively approves payers to be "mass payers".
  • Tipalti is not part of this approval process.

Set up PayPal

Tipalti processes PayPal payments by executing payments in the payer's account. Therefore, Tipalti must be allowed to do the following in the payer's account:

  • Check the PayPal balance
  • Issue payments via the PayPal API

To allow Tipalti to execute payments, complete the following steps. If you already have a PayPal business account, go directly to step 2 below.

Go to PayPal and ensure you sign up for a business account.

You only need approval if you have chosen to use PayPal's mass pay system. Contact PayPal Customer Service or your account manager for approval. If you do not want to use PayPal's mass pay system, Tipalti processes your PayPal payments as single payment transactions.

To determine if your PayPal account is configured as a mass payment account:

  1. Log into PayPal.
  2. In the PayPal menu bar, click "Money".
  3. In the left navigation pane, click "Send or request money".
  4. Click "Make a mass payment". If your account is not configured for submitting mass payments, a message displays advising you on how to proceed.

If you have payees that want to be paid via PayPal in countries not supported by PayPal's mass pay, you can:

  • Ask Tipalti to process your payments as regular PayPal transactions.
  • Offer your payees additional payment methods, such as Global ACHAutomated Clearing House/Local bank transfer, wires, checks, or prepaid debit cards.
  1. In the PayPal menu bar, click PayPal settings icon to view the "My Profile" screen.
  2. In the left navigation pane, click "My account settings".
  3. In the options list, under "Manage users", click "Get started".
  4. Click the "Add user" button.
  5. Type a user ID and password into the corresponding fields.
    Take note of this information, as you need to provide it to Tipalti later.
  6. In the "First name" and "Last name" fields, you may type: Tipalti. Although the username "Tipalti" is suggested, you may use any name.
  7. Complete the information, then click "Continue".
  8. Under "Administration", ensure that you select "View Balance" and "View Profile".
  9. Click "Continue".
  10. Click "Done". The user you just added displays on the "Manage users" screen.
  1. In the PayPal menu bar, click PayPal settings icon to view the "My Profile" screen.
  2. In the left navigation pane, click "My selling tools".
  3. Under "Selling online", "API access", click "Update" to view "Your payment API credentials".
  4. In the "Pre-built payment solution" box, click "Grant API permission".
  5. Copy and paste the following Tipalti ID into the "Third Party Permission Username" field: payment_api1.tipalti.com
  6. Click "Lookup" to see a list of available permissions.
  7. Select the following "Available Permissions":
    • Get your PayPal account balance.
    • Get information about a single transaction.
    • Search your transactions for items that match specific criteria and display the results.
    • Get authorization for pre-approved payments and initiate pre-approved transactions.
    • Initiate transactions to multiple recipients in a single batch.
    • Generate consolidated reports for all accounts.
      The permission "Generate consolidated reports for all accounts" is not available in some countries. If you receive an error message about this feature not being available in the country where you have your PayPal account, then leave this permission field unchecked.
  8. Click "Add".

Instant Payment Notifications (IPNsAn Instant Payment Notification (IPN) is a messaging service that enables you to receive notifications from Tipalti. IPNs are triggered when defined events occur (e.g., updating payee details).) are PayPal's way of notifying Tipalti when a payment event occurs. Tipalti supports the following PayPal IPNs:

  • Mass payment started/ completed notifications
  • Single payment performed/ completed notifications
  • Payment refund (only for a single payment, not mass payment*)

*If a payee chooses to refund a payment received via mass payment, PayPal will not send an IPN so Tipalti will not be able to automatically process such refunds. You need to notify Tipalti or update the Tipalti Hub manually (see PayPal mass pay rejections).

To set up IPNs in PayPal, follow these steps:

  1. In the PayPal menu bar, click PayPal settings icon to view the "My Profile" screen.
  2. In the left navigation pane, click "My selling tools".
  3. Under "Getting paid and managing my risk", click "Update" to open the "Instant Payment Notification (IPN)" screen.
  4. Click "Choose IPN Settings".
  5. Copy and paste the following URL into the "Notification URL" field: https://ipn.tipalti.com/notif/tipaltiipn.aspx
  6. Under "IPN messages", select "Receive IPN messages (Enabled)".
  7. Click "Save" to view the "Instant Payment Notification (IPN)" screen. Under "Current settings", you see the notification URL you just added, and the "Message delivery" field displays "Enabled".

Please provide Tipalti with the following PayPal information:

  1. The username, ID and password that you created above in step 3 where you added a Tipalti user with certain privileges.
  2. The email address you use to log into PayPalTipalti does not need to know your PayPal password.

The email address is part of the API calls that Tipalti makes and is used by PayPal to identify that the request is for your account.

  1. In the PayPal menu bar, click PayPal settings icon to view the "My Profile" screen.
  2. In the left navigation pane, click "My money".
  3. In the "Bank accounts" section, select "Link a new bank account".

  4. Do one of the following.

    1. Click one of the banks that displays.
    2. Click "I have a different bank". The "Add a Bank Account in the United States" screen or the "Add a Bank Account in Canada" dialog displays.

      In the "Country" field, you can toggle between "United States" and "Canada". Select the appropriate country.

  5. In the "Bank Name" field, type the bank name.
  6. Under "Account Type", select "Chequing" (Canada) or "Checking" (US).
  7. Type the remaining account details into the empty fields.
  8. Click "Continue" and follow the PayPal procedure to validate the account.

You cannot link the Tipalti virtual account to PayPal.

View PayPal verification deposits

As part of the linking between PayPal and your bank account, PayPal deposits two small amounts into the bank account. A successful deposit indicates that integration between the accounts is complete. You can check deposit amounts on the bank's website.

Fund account

We recommend that you prefund your PayPal account well ahead of time because it takes between 1 and 2 business days (depending on the payer's country) from the date of funding until the PayPal account reflects the beneficiary balance.

Payments

Payments are executed when the PayPal provider account is fully funded. No partial execution of a mass payment batch is available.

PayPal has a maximum payment thresholdThe minimum/maximum amount that can be disbursed per payee currency and payment method amount of USD 9,500.00. If a single payment exceeds this amount, Tipalti automatically splits the payee's payment.

PayPal mass pay rejections

If PayPal rejects a payment sent using a PayPal Mass Payment account, the status of the payment is not automatically updated in the Tipalti Hub. Therefore, when you receive a rejection notification from PayPal, please submit a ticket to our Support Team who will update the Tipalti Hub. Alternatively, you can update the payment status directly in the Tipalti Hub by following these steps.

  1. Log into the Tipalti Hub.
  2. Search for the payee.
  3. On the "Payments" subtab, find the relevant payment orderA single payment instruction for a payee.
  4. At the end of the payment order row, click Actions button and select "Update status".
  5. Click "Confirm".

Failed PayPal verification

If you are using the Supplier Hub to onboard payees, the PayPal information that payees enter in the portal must match the PayPal records. If it does not, the following validation message displays .

PayPal validation message

Please ask the payee to provide the following screenshots from the PayPal account.

Payee's PayPal name

Payee's PayPal email address

Tipalti uses the payee's name and PayPal account email address shown in these screenshots to try to match the payee's information between systems. A match is required for the payee to be payable by Tipalti.

If the payee had entered multiple first or last names, the grouping of these names by PayPal may have been the issue when matching the information. Consider the following example.

Example
Payee name: Jon Louis Casper Smith

If the payee used Jon Louis as the first name and Casper Smith as the last name in the Supplier Hub, it may cause a 
mismatch as PayPal may have grouped the first name as Jon Louis Casper and the last name as Smith.