Best Practices When Setting Up New Clients

  • Please wait 5 business days after sending a new client agreement before sending transactions. This will allow us to get the client set up and reduce potential processing delays.
  • Ensure ALL fields are completed before submitting agreements.
  • Utilize e-contracts - it’s free, electronic, and the EIN verification is included.
  • EIN verification is required when submitting the PDF/paper version. To see acceptable forms of EIN verification, click here. When using e-contracts, this step is done for you!
  • The payroll transaction estimates box is required and is used as a fraud mitigation tool. Please enter your best estimate as to what the dollar amount will be starting out.


When sending prenotes, the waiting period is 3 banking days before submitting live transactions.

In accordance with the Nacha rules Section 2.6, there is a waiting period following prenote entries. It states that, “an originator that has submitted a prenotification entry to a receiver’s account may initiate subsequent entries to that account as soon as the third Banking Day following the Settlement Date of the Prenote, provided the ODFI has not received a return or notification of change related to the prenote. If the ODFI receives a return or NOC in response to the prenote by opening of business on the second Banking Day following the Settlement Date of the prenote, the originator must not transmit subsequent entries to the receiver’s account until it has remedied the reason for the Return Entry or made the correction requested by the notification of change.”

Effective Jan 1, 2021, when a prenote and a live entry are submitted within 3 banking days to the same account, the live entry will not be accepted and will be returned as an Xcelerated Return (R97). To avoid a delay in transactions, please allow a minimum of 3 banking days after sending a prenote to send the live entries.

If you have any questions about this Nacha rule, please reach out to the Risk Department. If you have questions on sending prenotes, please ask for the Operations Department.

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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!


Large Dollar Payroll Files

Due to fraud and risk mitigation, files containing a significantly larger-than-normal dollar amount may result in a delay if being sent for next day processing. Its’ best to reach out to the Operations Department ahead of time so they can assist you.

Additionally, as we near bonus season, please keep Kotapay’s high dollar procedures in mind.

Coming Soon 

Coming Soon! A few updates of things to come from Kotapay

Updating Your Kotapay Password Every 90 Days

Your Kotapay password will be expiring soon. As an additional level of security, you will be prompted to update your password every 90 days. You will begin seeing notifications as your current password nears the expiration date.

Email Notifications Upon Client Set Up

A frequent request from our Processors is an email notification once a new client has been set up. We’re excited to be rolling this out in the near future! An email notification will be sent when a new client is set up or when a client revision was submitted and completed by the Kotapay staff.

Chat with Kotapay!

Soon, you will be able to visit with the Client Support, Operations and Sales Departments via chat! Look for a chat bubble in the lower right corner and click to visit with our team.

What to know about impounding client funds

Money transmitter licensing regulation and fines have continued to be a hot topic within the payroll industry. The language within previous 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. Click here to view our White Paper.

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.