Building Creator Trust Through Better Payments With Tipalti

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[00:00:25] Welcome back to the Tech Talks Daily Podcast, where every day we go beyond the headlines to discover how technology is solving real business problems and changing the way organisations operate. Now, finance seldom grabs the spotlight when people talk about AI. Yet, behind every fast-growing business is a finance team that's trying to keep pace with increasing complexity, global regulations and rising expectations.

[00:00:55] And if you throw the creator economy into the mix, where millions of people expect to be paid accurately, on time, every month, suddenly payments become far more than just a back-office process. And today's guest knows that journey better than most. In fact, this is his second appearance on the podcast. Last time we spoke, Tipalti, the company's ads, described itself as an AI-powered platform for finance automation.

[00:01:23] Fast forward two years, and the company now calls itself the agentic AI platform for finance. Might be a small change in wording, but I think it says a lot about just how quickly this industry is evolving. But enough for me, it's time for me to officially introduce you to my guest today, who's going to discuss how AI is reshaping finance operations, explore why payments have become a competitive advantage in the creator economy,

[00:01:49] and how businesses can build trust by treating its creators as partners, rather than simply another supplier. But let's welcome him back onto the show right away. So thank you for joining me on the podcast today, Rob. Can you tell everyone listening a little about who you are and what you do? Yeah. Rob Israk, I'm the president for Tipalti.

[00:02:14] I've been with the company 11 years, so when we were in the 20 employees and now up to 1,000 employees or so. So it's been a journey. I essentially, as president, oversee the entire buyer journey and customer journey for the company.

[00:02:29] So really, you know, looking after pre-sales all the way to post-customer experience and the various different organizations and teams in between to ensure we deliver a good customer experience. So that's about me. I've spent pretty much my entire career in the finance function, working for companies like GE Capital, Intuit, who makes solutions like QuickBooks and others that you might be familiar with,

[00:02:58] and NetSuite, and then finally Tipalti for the last 11 years. But it's been interesting to see the finance function and the role of finance change over that course of time. It used to be just a back office function, and now it's really moving into a strategic driver of the business, enabling the business to grow well, but in a responsible, efficient way. And so that's been good to see.

[00:03:24] And I think with AI, it'll only accelerate that transition. Well, thank you so much for sitting down with me today. Every day here on the podcast, we take a different topic, try and drill down on it, get people thinking differently about areas that technology impacts that they don't associate with tech very often.

[00:03:43] And one of the subjects I wanted to raise with you today is the gaming creator economy, which is a multibillion-dollar ecosystem where players, streamers, and developers all monetize content. But most importantly, it has exploded to tens of millions of people around the world. I'm curious. How have you seen that kind of scale exposing weaknesses in traditional payment systems that many platforms are relying on today? Yeah, yeah.

[00:04:11] The gaming and the creator economy have completely scaled at a pace, I think, that would not have been foreseen a decade ago even. But yeah, it puts stress on the infrastructure of the company to support it because very much that creator economy world operates differently than your traditional finance workflow and economy.

[00:04:37] And actually, surveys out there of finance leadership say that essentially there's a lack of automation to kind of keep up with the scale. And it's compounded in that gaming creator space for sure. You know, people prior were used to paying out and making payments to folks in the hundreds. So now it's in the thousands and the hundreds of thousands and the millions in some case, particularly in that creator economy space.

[00:05:07] And it really then amplifies any disconnected processes you have and various different disconnected systems you may have. It makes everything much more troublesome to manage the process. Finance was not built to manage that. And that's why, you know, these types of companies really struggle to scale as they operate unless they put some technology in place to help them really run with that pace.

[00:05:38] And one of the reasons I wanted to bring this up today was I read that at Tipalti, you highlighted that up to 87% of creators have experienced late payments, which is just a breathtaking stat for all the wrong reasons. But what impact do you find this has on everything from trust, retention, and ultimately that long-term relationship between creators and platforms? Because it's a worrying stat, isn't it, that one? Yeah, that's amazing, actually.

[00:06:05] And it's amplified, you know, as the volumes go up and the number of people you have to pay out to the creators, you have to make payments to. The more global you are in nature, which is a very common use case in this gaming and creator space we're talking about. So, and it's not a finance problem. It used to be a finance problem, but it is a trust problem because in the creator economy, the creators are in many ways the customer and one of the core end users. Ultimately, the creators are the product.

[00:06:33] And so if you have a trust problem with your creators, it's a real issue because the creators, the top creators may go to another platform as a result, or they may not give you their mind share and their time effectively. Ultimately, you know, ultimately they're working with you to get payment ultimately. And if that experience is not good, if it's late, if they don't get the payment method they want or the currency they expect, it's going to be a problem for you long-term.

[00:07:03] That actually should be your moat and your differentiator. And payments gets in the way of you executing on that. So, you know, they run, you know, creators are business people at this point and they expect a professional experience on the other end from the platform they're working with. And delayed payments are probably the strongest single touch points to erode trust quickly with them and to cause them to kind of think otherwise of where they should go.

[00:07:33] So that retention and that relationship and that experience with them, including the payment experience and communication of the payment experience and the such is really, really critical to trust. Yeah, and it's something that I've had experience with myself and it's not uncommon to have payments one or up to three months later. It can be quite a common occurrence. And when you're dealing with a large organization that, you know, means nothing to them, but to you, it's kind of your livelihood.

[00:08:01] You know, it does hurt. And payments are often treated as a back office function, but you're positioning them as more part of the creator experience. So how should businesses be rethinking payments as a frontline product feature? Yeah, I mean, if you think of the creator as the customer and one of the key folks you have to deliver a great overall experience to, it removes and payments are a critical part of their experience with you.

[00:08:31] Then you have to flip it on its head and look at it from that perspective. And sure, yeah, finance is involved and it is a financial transaction, but it's one of the most important parts of that overall customer creator experience.

[00:08:46] And so rather than thinking of it as a just payment infrastructure, kind of really flipping on the head and looking at it from that perspective, they expect, you know, transparent payment status, payment status communications, flexible payout methods, reliable payment timing and wherever they are. It should not matter. It doesn't matter where you are headquarters, a platform or where they are based as a creator.

[00:09:13] You've got a plan for that in the infrastructure you build and for long term scale. All the technology available nowadays, fortunately, automation, AI, it makes it easy to enhance that experience to make sure that you can pay out on time, wherever they are in various different payment methods, providing choice and visibility and such. So, you know, it really can supplement the human element of relationships from that perspective if done right.

[00:09:43] So as platforms continue to work with creators across what multiple countries, currencies and compliance frameworks, there's a lot going on there. But I'm curious from what you're seeing, what are the biggest operational challenges that they're facing when trying to scale payments globally? Yeah, I mean, the first thing I'll say, Neil, is you alluded to payment errors earlier. Payment errors compound.

[00:10:07] It goes up significantly when you go global because there's a lot of information. So even on just the collection of the payment information and the payment methods available, every country, every jurisdiction and then compounded by the different payment methods and currencies collect and require different forms of information in order to make a payment.

[00:10:30] If you don't collect the right information by the right geography for the right payment method, you will increase your payment errors for sure. No question, like in the range of two to three X. And so there's complexity there. There's around 26,000 rules for global payments that have to be checked. And if they're not checked proactively, you will get greater payment method.

[00:10:54] On top of that, of course, every jurisdiction has different tax form ID requirements that have to be collected and checked or should be upfront in the process. You have regulatory requirements like OFAC or sanctioned screening. Again, there's five different databases out there of what you should be checking prior to any payment to make sure you don't pay someone you're not supposed to and you collect the necessary information. And then you've got other kind of regulatory rules along the way and fraud, of course, throughout that process.

[00:11:23] So it's quite complex. And, you know, you either need a process proactively where humans are checking it or you have to figure out a way to essentially do that through technology to scale efficiently. And, of course, automated mass payments are becoming more and more common. So what does that modern payment infrastructure look like for a creator first business? And how is it removing friction for both sides there? What are you seeing? Yeah.

[00:11:51] So, you know, I can tell you in our use case, like the Tipalti story. When we started, we've been in the creator economy. It wasn't called the creator economy back there, but it was a digital economy. But when we started about 15 years ago, it started literally with an ad tech company who is in our co-founder, Oren Zev. One of their portfolio companies they were investing in was an ad tech company.

[00:12:18] And they were paying out, in that case, affiliates and publishers around the world. And the CEO himself was spending one out of five days a week doing those payments because it's payouts of the business. And it's a very sensitive financial transaction. And he came to Oren and he said, look, I cannot figure out how to do this more efficiently. It's a bad use of my time. I can't find a solution that can handle this.

[00:12:45] And he said, if you can start a company and solve this for me, I'll be your first customer. And, you know, Oren has good ears for investments and heard that. And then, you know, found his former, his friend, Khan Ami, they went to NC University together. And that's when Khan started evaluating the company.

[00:13:07] When he sat down with actual companies in this space, he found out, well, they explained the problem as a payment problem or a payouts problem, a mass payments problem. Actually, it's a workflow problem. And that's the key. The key is to really put in a modern infrastructure that scales. You have to look at the end-to-end workflow. In the case of the crater space, onboarding is really cumbersome because, of course, you've got to onboard all these craters and collect all that information I talked about.

[00:13:35] And then you need to address everything from crater onboarding, the tax collection validation, approved workflows for payments and execution of those mass payments globally. Fraud detection, communication on payment status with creators, reconciliation and maybe integration with maybe performance marketing or other monitoring systems and tracking systems. And maybe even an accounting or ERP platform.

[00:14:01] And then, of course, reporting on tax, tax reporting and other types of reporting you may need, audit trails, controls, all that good stuff. So really, you have to look at that end-to-end process. And if you only widgetize one element of that Chevron and not the others, it creates payment errors or creates delays or creates communication issues and the such.

[00:14:24] And so that end-to-end approach is really key to really having a process that scales with you as your gaming platform keeps growing and growing. And I think transparency is also something that seems to be a reoccurring issue in this space. So how can giving creators real-time visibility into things like their payment status, how can that reduce support overhead and also improve loyalty? Because it feels like there's a lot of opportunities there too, right? Oh, yeah. Yeah, absolutely.

[00:14:54] Like there's the efficiency side of the equation from the business perspective. But creators are so important to these business models that you have to give them a good experience as well. And so, you know, there's the first part of onboarding them and not having them have to send their financial information via email, making sure it's secure and making sure there's not a lot of back and forth.

[00:15:16] And so the self-service onboarding part ensures you have a good, clean, efficient process and that you provide the creator with choice. Later on now, once they provide the payment information, the tax IDs and any other required information up front, and it's already been vetted and validated, now you already know how they want to get paid, which currency they want to get paid. And you have all the information that reduces that risk of payment error.

[00:15:42] When you actually get to that part of trying to make the payment, you have to communicate that a payment has been attempted, a payment's in process, a payment's landed. If there is a payment error, you have to communicate there has been a payment error proactively, not at the point the creator realizes they haven't been paid for three weeks. If there's a missing tax ID or information that's required, you have to communicate that. All of that can be automated with email stitched right into that process.

[00:16:10] And so you automate the emails to them, but you give them much better communication and an ability to see where the payment status is, when it's landed, and all that good stuff. And of course, that information has to be available to the finance team as well. So the communication status is a really key part. And even if you have an error, if you communicate that error proactively and clearly, it makes a big difference, that overall experience. Ideally, you don't have that error, and you can make all those communications.

[00:16:37] And it really simplifies and improves the experience on both sides of the equation. And one of the other big changes I'm seeing there is this growing expectation from creators to be treated more like partners than just another contractor. At least that's how I perceive many of the emails and the pictures that I seem to get. But when we're looking at payment practices, how does that reflect how much of a platform values its creator community? Because it feels like almost the missing piece of the jigsaw. Yeah, totally.

[00:17:06] I mean, creators are business partners. It shouldn't be that they want to be treated like business partners. They should be thought of as business partners. Your business, particularly in the space, is really not much of a business without the creators. And so it is your product experience. It is your customer experience. And so the creators have to be looked at as business partners. And this process cannot be looked at as a financial process only.

[00:17:31] It's just part of your relationship with your partners who are key to your product proposition and your experience with the end customer. And, you know, leveraging tech to strengthen those relationships versus simply being a afterthought is key to delivering that to ensure that you're providing the flexibility, the transparency, the predictability on this whole part of the experience, creating confidence and reinforcing the state of your partnership.

[00:18:01] But, you know, ultimately looking at it as a customer loyalty play and a differentiator of your business, not, you know, just something you have to do. And for companies that are building or scaling a creator, a creator ecosystem today, are there any practical steps that, especially if people are listening, that they can take to maybe better modernize their payment systems and avoid becoming the platform that creators choose to leave?

[00:18:27] Yeah, you know, I think, you know, looking at your creators as a partnership and kind of mapping out their experience that you want to deliver and the key touch points and moments of truth in a way that you want to deliver with the payouts part of it as part of that experience overall.

[00:22:49] Sure. Sure. Sure.

[00:23:20] Really interesting time and exciting time and exciting time, but also confusing time at times to figure out how to leverage this technology and the pace of growth and the pace of change. But you have to jump right in headfirst, which our company has absolutely done pretty aggressively.

[00:23:36] And so it's been a fun experience and we're hearing really good feedback from our clients on the changes and improvements and the more interactive way clients can interact with both you as a company and with your solution leveraging AI, which is all pretty exciting.

[00:23:55] Pretty exciting. So, so it's a, I think we're, we're fortunate to be in the space we are and, and in the time we are, it's a lot of change, but, but very dynamic and exciting. And if you have the right mindset for it. Exciting times ahead. Exciting times ahead. And for anybody listening that would like to dig a little bit deeper on all things to Polity and everything that you're doing, everything we referenced today, where would you like me to point everyone?

[00:24:23] Yeah. I mean, of course you can connect with me on LinkedIn or with Polity on LinkedIn. Um, you know, you can always follow us via our website, all of our different social channels, um, to keep track of, we publish a whole raft of research insights reports and the such, um, and other resources.

[00:24:42] So, um, you can go to tipalti.com. You can, you know, track me down on LinkedIn and, or the, our company social feed, uh, to hear what's latest in the industry and different trends and patterns and the such. Um, so I think that would be a good, great, great place to go. Awesome. Well, I'll add links to absolutely everything that I urge people to check you guys out and we cannot leave it another two years till we speak again, especially now you're chasing your hat trick of appearances on here.

[00:25:10] So hopefully we'll get you on a little bit sooner, but thank you for sharing your insights again. Pleasure as always. Yeah. Yeah. It was great to speak to you again, Neil. Yeah. Definitely. Let's do it sooner next time. I think one of the things that stood out from today's conversation is as AI changes the finance function, the biggest opportunity isn't simply automating more tasks. It's creating better experiences for the people and the businesses who rely on those financial processes every day.

[00:25:40] And whether you are supporting creators, managing global suppliers, or modernizing finance operations inside your business, trust still comes down to getting the fundamentals right. And that is paying people accurately, communicating clearly and removing unnecessary friction that might not grab the headlines, but very often have the biggest impact on long-term relationships.

[00:26:06] So if you enjoyed today's episode, love to hear your thoughts as has AI changed the way your finance team operates? Or are you just at the very beginning of this journey? Let me know. TechTalksNetwork.com. I'll be back again tomorrow with another guest and another conversation with someone. I'll be back again tomorrow for another conversation with a guest that is playing a big part in shaping the future of technology. But enough from me. But that's it for today. Bye for now.