Not long ago, there was a flood of gamers beating down Tipalti's door, looking for an option to make money from the content they streamed while on lockdown. Just as quickly, that slowed as people returned to offices or started going outdoors more often. And then everything got more expensive.
"We're living in crazy times," said Chen Amit, co-founder and CEO of Tipalti, an accounting software firm that also provides payment processing for companies with a geographically-disparate workforce. Its clients often include contractors or freelancers, or firms that heavily use contractors, who are paid through Tipalti's business payments product.
Tipalti last week rolled out a virtual card, and the company's user base passed 2,500 clients for the first time. But like a lot of payment companies, there's little visibility into the next year, which will likely be as unpredictable as the past two because of inflation and a potential (or narrowly avoided) recession. That has the firm looking for ways to contain its own spending while improving the software it sells that supports payments for business suppliers, partners and workers.
The company's virtual card is designed for clients' employee and business expenses, and disbursements to employees. Staffers can create debit or credit cards on demand with approval controls. An app allows the staffers to view card, ACH, wire transfer, PayPal, prepaid debit and check transactions in a single location.
It is part of a broader expense management system that is under development at Tipalti, with a scheduled release in 2023. Tipalti also plans several third-party integrations in the coming months, including DocuSign to provide visibility into contracts, Datarails for business expense management, CloudEagle for software spend tracking and other services that power analytics and financial data.
Unlike some other payment technology companies, Tipalti has not downsized its workforce, though it is slowing the pace of hiring and is focusing its investments into technology that reduces labor costs for its clients.
"The customer growth in users is there, but the impact of inflation remains to be seen," Amit said, noting that during the pandemic, the company saw a dramatic increase in payment processing work for digital content providers such as gamers who stream their gameplay for an audience online.
"But once we got out of COVID there's been much less work for streamers," he said. "The good news is in the past two or three months there has been a rebound."
Tipalti is making its upgrades as rival
Tiipalti contends there is a robust market of freelance workers, and potential demand among content creators. A majority of people in the U.S. would like to pursue content creation as a career, but do not because of an inability to get quickly paid and fairly compensated, according to a Tipalti/Wakefield Research survey of about 750 content creators.
The survey also found more than a quarter of creators are leaving a 9-to-5 job to make content full-time; 40% expect companies to hire more content creators and 40% predict more people will start their own practice. The study reported 90% of creators have had trouble getting paid, 41% increased their rate to compensate for late or incorrect paychecks and 70% said administrative tasks such as billing and receiving payments has prevented them from becoming a full-time content creator.
"This tough period of inflation finds many workers susceptible to cash-flow issues that makes paying bills on time more difficult," said Sarah Grotta, director of the debit advisory service at Mercator.
While Tipalti and Quickbooks' clients often have full-time staff, they also employ on-demand
Both Tipalti and Quickbooks are focusing on payroll flexibility, but are not emphasizing earned wage access or buy now/pay later, which are favored products from many fintechs. During the pandemic, earned wage access and
But contract workers usually don't get paid on the traditional two-week cycle as "full-time" staff. Both Tipalti and Quickbooks want to to build broader relationships with businesses, where payroll is just one of many expenses. The companies also hope to cover supply chain financing, business-to-business invoicing, tax compliance, procurement controls and other services.
Earned wage access programs and other products designed for consumers facing financial challenges also face political scrutiny from
That could create demand for payroll options beyond earned wage access that could be a better fit for gig economy workers and other freelancers.
"Some employers are concerned, however, about the uncertain regulatory environment for EWA and are waiting for clarity," Grotta said.
