What Kotapay does

Kotapay is a Fargo, North Dakota-based electronic payments division of First International Bank & Trust (FIBT), founded in 1993 and operating across all 50 U.S. states with 107,000+ clients. The company provides ACH processing (direct deposit, direct payment, FBO accounts, payroll cards), credit card processing (delivered through a partnership with Basys Processing), and an online payment gateway called KotaConnect. Its core customer segments include payroll providers, CPA firms, non-profits, and general businesses, with payments-expert-driven direct sales and channel referral partnerships as primary go-to-market motions. Pricing is quote-based and not publicly disclosed; revenue is generated primarily through per-transaction ACH fees, credit card processing residuals, and subscription/platform fees for the KotaConnect gateway.

Kotapay's technology stack centers on the Kavinu BaaS platform, a cloud-native, API-driven embedded banking infrastructure that the company describes as removing the "fractured middleware" model common to non-bank BaaS providers. Kavinu is backed by FIBT's bank charter, which provides regulatory cover and FDIC association — positioning Kotapay's BaaS offering as a "bank-direct" alternative in a market that has seen enforcement actions against competitors. The architecture supports real-time payment flows, including a "Windowless Payroll" model enabling 24/7/365 employer funding with instant or same-day ACH distribution. Proprietary fraud detection systems, ACH returns management, FBO accounts, payroll card issuance, and eContracts (DocuSign-based) round out the product portfolio.

The business model combines transaction-based ACH fees, credit card interchange residuals, and subscription/platform revenue from KotaConnect and Kavinu, all anchored by the balance-sheet and regulatory foundation of FIBT ownership since 2018. In 2026, Kotapay launched its Kavinu platform with digital gifting fintech Giftly as anchor client (transferring $21.8M+ in cash balances at go-live), opened a new office in Sioux Falls, South Dakota to access payments-industry talent, and added five specialized BaaS and card-payments hires. The company employs 11-50 staff and is led by Chief Payments Officer Trent Sorbe, with product strategy led by VP Brooke Fitts and BaaS operations by Heather Schumacher (AFPP-certified).

Name

Kotapay

Legal name

Kotapay

Website

https://kotapay.com

Company type

Private

Founded year

1993

Operating status

Operating

Headcount range

11–50 employees

Short description

Kotapay is a Fargo-based division of First International Bank & Trust providing ACH processing, credit card processing, and embedded banking-as-a-service infrastructure to 107,000+ payroll providers, CPA firms, non-profits, and fintechs across all 50 U.S. states.

Ownership category

akta.pro rank

Product category

Payment Processing Services

NAICS

Financial Transactions Processing, Reserve, and Clearinghouse Activities (52232), Financial Transactions Processing, Reserve, and Clearinghouse Activities (522320)

SIC

Finance Services (6199), Functions Related To Depository Banking, Nec (6099)

akta.pro primary industry

Integrated Payment Processors (PSP/Acquirer) (FSAMABAA)

akta.pro secondary industries

Embedded Payments (Pay-ins, Pay-outs, Wallets) (FSAGALAB), Digital Payments & Money Movement (ACH/SEPA/FPS, Bill Pay, P2P) (FSAGAAAF)

Keywords

• ACH payment processing
• Credit card processing
• Banking as a service
• Payroll direct deposit
• Electronic payment solutions

Headquarters

HQ city

Fargo

HQ country

United States

HQ region

North America

Offices2 records

Markets served

GTM type

B2B

Offering type

Services

Cost components

Technology or R&D, Personnel, Operations, Infrastructure, Marketing or Sales

Revenue model

1. ACH Transaction Processing: Revenue generated from ACH payment processing services including direct deposit, direct payment, and same-day ACH transactions. Fees are typically per-transaction based, serving payroll providers, businesses, and financial institutions.
2. Credit Card Processing: Revenue from credit and debit card processing services, provided in partnership with Basys Processing. Includes terminal-based, online, and remote payment processing.
3. BaaS Platform Services (Kavinu): Revenue from Banking as a Service platform licensing and processing fees, enabling fintechs and digital platforms to embed banking services. Generates non-interest income through scalable ACH volume and platform fees.
4. Payment Gateway Services (KotaConnect): Online payment gateway providing consolidated ACH and credit card payment management. Generates recurring access fees with no long-term commitment requirements.

Go-to-market motion3 records

Distribution channels5 records

Marketing channels7 records

Core offering

Kotapay provides electronic payment solutions centered on ACH processing (direct deposit, direct payment, FBO accounts, payroll cards) and credit card processing, supported by an online payment gateway (KotaConnect) and a bank-direct Banking as a Service platform (Kavinu) that enables fintechs and digital platforms to embed payment services. The company serves businesses, payroll providers, CPA firms, non-profits, and fintech companies nationwide with bank-backed regulatory stability.

Product overview

Kotapay is a payment solutions provider offering a unified portfolio of electronic payment products built around its core ACH processing infrastructure. The platform comprises the Kavinu BaaS platform (for embedded banking services), KotaConnect payment gateway (for unified ACH and card management), dedicated ACH services (direct deposit payroll, direct payment, FBO accounts, payroll cards, ACH returns), credit card processing, Payment Portal, and accounts receivables automation. The architecture is anchored by Kotapay's trusted ACH infrastructure backed by First International Bank & Trust's bank charter, which provides regulatory stability and exempts customers from money transmitter licensing requirements.

Differentiator

Problem solved

Functional benefit

Brands

• Kavinu: Bank-direct Banking as a Service (BaaS) platform powered by Kotapay, providing embedded payments infrastructure with bank-first approach.

Products and services

• Kavinu BaaS Platform Cloud-native, API-driven Banking as a Service platform from Kotapay that enables fintechs and digital platforms to embed deposit accounts and ACH payments directly into their applications, removing the middleware layer. Targeted at fintech companies and digital platforms seeking bank-direct compliance and faster time-to-market.
• KotaConnect Online Payment Gateway Online payment gateway that lets businesses manage all ACH and credit card payments in one location with no software maintenance fees or long-term commitments. Targeted at SMB and mid-market businesses that want consolidated payment management.
• ACH Direct Deposit Payroll Processing Core ACH processing service that enables businesses to pay employees via direct deposit and vendors in a cost-effective and efficient manner while reducing manual tasks. Backed by over 30 years of ACH expertise and proprietary fraud detection.
• Credit Card Processing Credit and debit card processing service offering multiple acceptance methods including terminals, online, and remote transactions, powered in partnership with Basys Processing. Targeted at businesses that need flexible card acceptance alongside ACH.
• Payment Portal An online payment page that businesses can add to their website so customers can make online payments via ACH or credit card. Targeted at businesses that need a hosted checkout or bill-pay page.
• Accounts Receivables Automation Automation solution that eliminates time-consuming accounts receivables processes and increases cash flow by automating billing and collection workflows for businesses.
• Payroll Cards Prepaid card solution delivered via ACH that allows employers to provide wages to employees who may not have traditional bank accounts. Targeted at employers serving unbanked or underbanked workers.
• FBO (For Benefit Of) Account For Benefit Of account service that enables third parties to hold funds on behalf of another party, commonly used in trust and fiduciary arrangements. Targeted at businesses operating escrow, trust, or agency-account workflows.

Quantifiable outcome

• $124B+ processed in 2025
• +3 more outcomes

Named customers3 records

Segments5 records

Ideal customer profiles4 records

Technology focussed Yes

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Feature5 records

Partnerships

Eight partnerships are on record, tiered core, flagship and minor.

• GiftlycoreStrategic or Co-development Partner · 24 March 2026Giftly, a digital gifting platform, launched on Kavinu, First International Bank & Trust's bank-direct BaaS platform. Kotapay provides ACH processing for the partnership. Over $21.8 million in cash balances were transferred at go-live. The partnership supports FIBT and Kotapay growth through expanded deposits, non-interest income, and scalable ACH volume.
• First International Bank & Trust (FIBT)flagshipStrategic or Co-development PartnerKotapay is a division of First International Bank & Trust, providing bank-direct payment solutions. FIBT ownership since 2018 provides financial security, stability, and regulatory foundation. The bank charter enables BaaS services with FDIC backing.
• Basys ProcessingcoreTechnology or IntegrationStrategic partnership with Basys Processing for credit card and debit card processing services. Provides hardware equipment including Clover terminals (Station Duo, Station Solo, Mini, Flex, Go) and FD150 devices.
• Thomson ReutersminorChannel Partner/ Reseller/ DistributorReferral partner for CPA firm segment, included in sitemap partner listings.
• Drake SoftwareminorChannel Partner/ Reseller/ DistributorReferral partner for CPA firm segment, included in sitemap partner listings.
• CPU Inc.minorChannel Partner/ Reseller/ DistributorLong-standing partner (40+ years) offering payroll, IT, and voice services to businesses in Cape Girardeau, Missouri. Featured in Kotapay blog case study.
• ICBA ThinkTech AcceleratorminorStrategic or Co-development PartnerLuke Pygman, Platform Services Manager at Kotapay, was selected to serve on the ICBA ThinkTech Accelerator Selection Committee, supporting community bank fintech innovation.
• Innovative Payments Association (IPA)minorStrategic or Co-development PartnerTrent Sorbe, Chief Payments Officer, participated in IPA podcast discussion about Sioux Falls as a hub for payments innovation.

Scale indicators7 records

Recent moves8 records

Expansion highlights5 records

Direct peers

• Dwolla: U.S.-based ACH payment processing platform serving fintechs, businesses, and platforms. Closely comparable to Kotapay's core ACH and BaaS offering, with overlapping target segments (fintechs, platforms) and similar per-transaction fee model.
• Synctera: Bank-sponsored Banking-as-a-Service platform enabling fintechs to embed deposit accounts, cards, and payments. Direct competitor to Kavinu in the bank-direct BaaS category with comparable compliance-first positioning.
• Unit: BaaS platform providing embedded banking, ACH, and card infrastructure to fintechs. Competes with Kavinu for the same fintech developer and platform customer base.
• Treasury Prime: Bank-API platform connecting fintechs to bank partners for embedded deposit, ACH, and card products. Direct Kavinu competitor with overlapping bank-sponsorship and compliance-first value proposition.
• Finix: Payment infrastructure platform enabling software companies to embed payments (ACH, card) and BaaS. Competes with both Kotapay's ACH processing and Kavinu's embedded finance positioning.
• PaySimple: SMB-focused ACH and credit card payment processing platform serving small businesses, non-profits, and recurring billing use cases. Closely comparable to Kotapay's KotaConnect gateway and verticalized SMB ACH business.

Emerging players

• Modern Treasury: Payment operations platform specializing in money movement, ACH, and real-time payments for B2B and platform use cases. Comparable to Kotapay's ACH and payment gateway capabilities, with stronger developer tooling.

Broad incumbents

• Stripe: Dominant internet payment processor offering ACH, card processing, and embedded financial services via Stripe Connect. Overlaps with Kotapay's ACH, card, and embedded finance products but at vastly greater scale and developer reach.
• Marqeta: Card-issuing and payment processing platform serving fintechs and embedded card programs. Adjacent competitor to the card side of Kotapay's offerings and Kavinu's BaaS roadmap.
• Fiserv: Large-scale payments and financial technology provider offering merchant acquiring, ACH, and BaaS-adjacent services to banks and businesses. Competes with Kotapay across ACH processing and merchant services with much broader product portfolio.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat5 records

Key risks6 records

Key highlights7 records

Customer concentration

• YouTubeyoutube.com/channel/UCLJYMKY4Jqe6KsNdB7Z703A
• Facebookfacebook.com/kotapay
• LinkedInlinkedin.com/company/intercepteft
• Xx.com/kotapay

Revenue estimate

Valuation estimate

Number of profiles

Profiles4 records

Funding overview

Funding rounds

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Kotapay