2024 Year in Review
2024 A Foundation for Innovation
I’m happy to report that 2024 was another record year for Kotapay. By processing more than 64 million transactions totaling more than $103 billion, we once again solidified our position on Nacha’s list of the top 50 ACH originators. Our core business of supporting the payroll and tax disbursements for 3,300+ processors and 107,000+ employers remains our focal point and the foundation upon which we can innovate.
The first such strategic innovation was the launch of our Kavinu platform in the fall of 2024. Kavinu is a developer-friendly, cloud-native API gateway enabling clients to easily access a host of new services, including ACH, real time payments, identity verification, and account validation, with virtual and physical card issuing (debit, mobile, prepaid, and payroll cards) planned for mid-2025.
To support these expanded services, we opened our second location in Sioux Falls, South Dakota and merged two additional divisions of First International Bank & Trust into Kotapay. Our Payments Strategy and Innovation and Card Operations teams are now part of the Kotapay division. Both groups are integral for us to bring you the new products and services found on Page 11.
We also continue to innovate in areas that many do not see, including how we help protect our clients and consumers from fraud and abuse. We are introducing new authentication methods for clients, incorporating additional automated intelligence systems to scan for suspicious behavior, and expanding our risk management team, including bringing on a Head of Payments Risk in 2024. We are proud that these steps, as well as the systems and processes that were already in place, have helped prevent significant financial loss for Kotapay clients.
Our ultimate goal is to broaden our relationship with clients by expanding the services you receive from Kotapay and helping you compete in your markets. We understand and appreciate the trust you have placed in us, and we take great pride in providing you with quality and dependable service. Thank you for all you did to make 2024 such a success for us.
Trent Sorbe Chief Payments Officer tsorbe@fibt.com
Your Payments Experts
For more than 30 years, Kotapay has been at the forefront of electronic payments and financial services, driving secure, reliable, and innovative payment solutions. Since 2018, we’ve been part of a financial institution, which has provided a strong foundation of security and stability. We offer a wide range of financial products and services to enable businesses to streamline their financial operations and optimize their cash flow. Years of experience, expertise, and knowledge have helped drive our success and made us a trusted partner for tens of thousands of companies.
Brooke Fitts VP of Payment Products & Strategy
Jim Haug SVP Managing Director of Kotapay
Eileen Donner
Trent
Cindy
Josh Buth
Ember Verkuehlen
Mandy
Backed by a Full-Service Bank
Kotapay serves as the payments division of First International Bank & Trust (FIBT), a full-service, family-owned community bank with a footprint spanning four states – North Dakota, South Dakota, Minnesota, and Arizona. Founded in 1910 as Farmers State Bank in Arnegard, ND, FIBT takes pride in its relationship-based business model, and the way its employees build longterm trust with customers. For the past two years, FIBT earned a place on American Banker’s list of the 20 Top-Performing Banks with $2B to $10B in Assets, a testament to its strong foundation and ability to stay nimble in an ever-changing financial world.
At the end of 2024, after decades at the helm, FIBT CEO Steve Stenehjem passed the torch to his son, Peter, who has stepped into the role of CEO. As the fourth generation to lead the family business, Peter brings fresh energy, a deep understanding of the bank’s values, and an unwavering commitment to our community. Leveraging FIBT’s 115-year banking heritage, Kotapay is committed to building the future of financial technology with integrity, scale, and innovation.
Scan this QR code to watch the video version of the 2024 Annual Report.
Guided by Industry Experts
As a company, Kotapay is committed to innovation. That’s why we formed the Kotapay Advisory Board in 2024. Pulling together this incredible group of thought leaders in payments and fintech ensures our assumptions are challenged, our view of the market is clear, and our strategy is sound. Members of the Kotapay Advisory Group include:
Andrea Corbine EVP, Sightspan, Inc.
Peter Davey Principal Advisor, Payments Jedi
Debra Geister CEO, Section 2 Group
Shana Hennigan Chief Business Officer, Raisin
Aaron Johnson Co-founder and CEO, APS Payroll
Ray Leach Director of Fintech, Augustana University
Wayne Miller SVP Innovation Programs, ICBA
Seth Ross Payments Professional, formerly Greendot, Ceridian, and MoneyGram
Sunil Sachdev Head of Embedded Finance, Fiserv
Jo Ann Sowers Account Executive/Fintech, Visa
Sheree Thornsberry Founder, RMP Solutions
Jennifer Tramontana President, The Fletcher Group
Kavinu™: Reimagining Embedded Payments
In September of 2024, Kotapay announced the launch of Kavinu, a breakthrough banking-as-aservice (BaaS) technology platform. Kavinu is built on our existing payment technology and is designed to improve the BaaS model that currently relies on unproven middleware and a lack of bank intermediation. The platform is an extension of our proven bank-grade technology and built on a foundation of more than a century of banking experience and stability from First International Bank & Trust.
BaaS Technical and Financial Flows
In mid-2025, we plan to announce our first suite of proprietary products developed on the Kavinu platform and tailored for Kotapay’s existing network of over 3,300 payroll providers. These products are expected to deliver added value to our existing clients, help us expand into new markets, and solve for a broader set of use cases.
Managing Risk and Helping Prevent Fraud
At Kotapay, maintaining the highest level of security and trust is at the core of our operations. We operate in a world where threats from bad actors evolve as fast as the underlying payments technologies. Given this ever-present threat, Kotapay remains proactive in identifying and mitigating fraud risk that could impact our customers.
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Kotapay delivers a high level of service with quick, friendly responses that keep our finance operations running smoothly. They’ve been instrumental in boosting our efficiency— streamlining processes, helping us work through acquisitions and consolidations, and offering sound practices which have helped identify and mitigate fraud risk. I couldn’t be more pleased with the fantastic Kotapay team. They’re a tremendous partner, and I’m excited to continue growing our relationship in the years ahead!
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MATTHEW THOMAS CREATIVE PLANNING BUSINESS SERVICES
99.3% of Fraud Prevented
Our risk management strategy is built on a comprehensive framework that integrates cutting-edge technology, industry best practices, and regulatory compliance. Key elements include:
• Gathering necessary documentation to confirm the identity of our customers and complying with all regulations.
• Utilizing a robust underwriting process to determine risk tolerances and define file parameters.
• Scanning each and every ACH transaction with our fraud detection system and identifying potentially fraudulent or unusual transactions.
In addition to the robust system we already have in place, we welcomed Mandy Cooper as our new Head of Payments Risk Management. Mandy brings more than 20 years of senior level risk and compliance expertise.
In 2024 alone, we helped prevent nearly $3 million in fraudulent transactions on behalf of our customers and as the financial technology sector continues to evolve, we remain committed to innovation in risk management and fraud prevention.
What Our Customers Tell Us
Serving our customers is the most important part of our business and the reason we do what we do. Whether it’s providing a way for employees to get paid via direct deposit or providing companies with methods to accept credit card payments, we at Kotapay love to help. We recently surveyed our customer base to learn more about what we’re doing well as well as our areas of opportunity. Here’s what some of our customers had to say:
“All teams respond quickly and have been very patient with our requests and have taught me so much. Your risk team has saved several of our clients from having fraudulent direct deposits go through. Your team is such a valuable asset to me and OUR team!! I enjoy engaging with them so much and I know I’ll get competent, fast help from all of them.”
“You get a person (vs. an automated answering service) when you call and someone is always available to answer our questions, which are usually time sensitive.”
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RESPONDENTS RATED THE HELPFULNESS OF OUR CUSTOMER SERVICE REPRESENTATIVES AS “EXCELLENT” OR “VERY GOOD” 90% 91%
OF RESPONDENTS SAID THEY WERE “SATISFIED” OR “VERY SATISFIED” WITH KOTAPAY
63 NET PROMOTER SCORE
TOP THREE WORDS CUSTOMERS USED TO DESCRIBE OUR SERVICES
We are a large payroll processor and upload multiple files daily. The services and processes on the Kotapay platform are straightforward and reliable. The support staff are incredible and are always available to resolve issues/questions that come up.
Kotapay Products & Services
ACH PROCESSING
Direct Deposit of Payroll
Accounts Receivable
Accounts Payable
Same Day & Next Day Processing Federal, State and Local Tax Payments
Benefit Payments
CREDIT CARD PROCESSING
Accept payments through software or terminal
WIRE DRAWDOWN
Good funds solution that applies thresholds to activate wire drawdown automatically
PAY NOW PAYMENT PORTAL
Custom-built payment page for your website to accept ACH or credit card payments
KOTACONNECT® PAYMENT GATEWAY
Use our web-based software to create and manage ACH & credit card transactions
PAYROLL CARDS
Provide a direct deposit solution for unbanked employees
FOR BENEFIT OF (FBO) ACCOUNTS
Allows you to manage funds on behalf of your clients
KAVINU
Redefining the Banking as a Service (BaaS) model by removing the middleman and providing direct access to a trusted bank partner.
COMMERCIAL & CONSUMER CARDS
Card-based payments (plastic or virtual)