Receiving money with Payments

If someone sends you a payment through Karat, you’ll receive an email notification with instructions.

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First-time setup

New recipients need to complete a one-time onboarding before funds are released:

1. Accept the payment invitation
2. Create or log in to your Karat account
3. Complete onboarding and submit tax forms if required by the payer’s collection setting
4. Choose how you want to be paid

The organization paying you can collect tax forms now, defer collection, or turn collection off. If they choose Do not collect, you can complete onboarding without a W-9 or W-8 for that payer. You still need to provide the information needed for verification and pass applicable checks. See Completing tax information for Payments. You may also receive an onboarding invitation before a payment is sent. If so, you can complete your tax information and payment method selection ahead of time. When the sender creates a payment, it is processed immediately without additional steps from you.

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Payout methods

Available methods depend on your location. Domestic (U.S.) recipients:

• Karat account
• ACH bank transfer
• PayPal
• Crypto

International recipients:

• International bank transfer (through local banks)
• SWIFT wire transfer
• PayPal
• Crypto

When choosing a payout method, each option shows its expected delivery time and any fee that applies to you. If the sender’s organization covers the fee for a method, you won’t see fee text on that method. Crypto network (gas) fees are always paid by the recipient.

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Choosing crypto

If you select Crypto as your payout method, you’ll be asked to choose a cryptocurrency and provide a wallet address. Supported cryptocurrencies:

• USDC (USD Coin) on the Ethereum network (ERC-20)
• USDT (Tether) on the Ethereum network (ERC-20)

To set up crypto payouts:

1. Select the cryptocurrency you’d like to receive (USDC or USDT).
2. Enter your Ethereum (ERC20) wallet address. The address must start with 0x and be 40 characters long.
3. Review your details and confirm.

A percentage fee plus crypto network (gas) fees apply and are deducted from the payment amount before it is sent. Fees are displayed before you confirm your payout method. See Payments fees for details. Crypto payouts are typically nearly instant once processed. In some cases, a payout may need to be completed manually by Karat: when that happens, your payout status will show as Processing until the transfer settles to your wallet. No additional action is required from you.

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Choosing SWIFT wire transfer

If you select SWIFT wire transfer as your payout method, you’ll need to provide:

• Beneficiary type: whether you are an individual or a business
• Your full legal name (up to 35 characters)
• Your address (street, city, and country)
• Your bank’s SWIFT/BIC code (8 or 11 characters)
• Your bank account number
• An optional routing number

After you submit your details, Karat runs a compliance verification check. This typically completes within seconds, but may take additional time for manual review in some cases. Your beneficiary status will show as one of the following:

• Verified: you passed compliance checks and can receive transfers.
• Pending: verification is still in progress. Payments sent to you will be held until verification completes, then released automatically.
• Disabled: you did not pass compliance checks and cannot receive transfers via SWIFT. Choose another payout method.

A fixed fee applies to SWIFT wire transfers and is deducted from the payment amount before the transfer is sent. The fee is displayed before you confirm your payout method. If the payment amount is too small to cover the fee, you’ll be prompted to choose a different method. All SWIFT transfers are sent in U.S. dollars (USD). Currency conversion, if applicable, is handled by the receiving bank. SWIFT transfers typically take 1 to 5 business days to arrive. After a SWIFT payment is submitted, the payment details in your dashboard show a UETR (Unique End-to-End Transaction Reference). You can share this reference with your bank to trace the SWIFT payment if it hasn’t arrived as expected. When a SWIFT transfer is initiated, you’ll receive a confirmation email with the transfer amount, the sender, and any fees that were deducted. Use this email as your receipt while the wire is in flight. You’ll get a second email once the transfer settles.

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Pending payment alerts

If you have unclaimed payments, a banner appears at the top of your dashboard showing the number of pending payments, who sent them, and the amount. Click Accept now to start or resume the acceptance flow. The banner picks up where you left off. If you already completed your tax information, you’ll skip straight to choosing a payout method. If you’ve already set up a payout method, you’ll go directly to the review step. If you haven’t received a payment yet but have been invited to set up your account, the banner reads “One step left before you can receive payments” with a Set up now button to complete onboarding.

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Future payments

After your first payment from a sender, your payout method is saved for that sender and future payments from them are processed automatically. You can update your method at any time from your Payments Dashboard.

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Receiving payments from multiple senders

Payout methods are saved per sender. If you start receiving payments from a new organization, you’ll be asked to choose a payout method for that sender the first time, even if you’ve already set one up with another sender. This lets you route payments from each sender to a different account if you want. Your tax information is shared across senders. Once it’s approved with Karat, you won’t need to resubmit it for new senders.

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ACH payout corrections

If you’re paid by ACH and the receiving bank reports corrected routing or account details for a completed payment, Karat automatically disables the affected bank account on your payout method so future payouts aren’t sent to outdated details. You’ll receive an email with a link to the payment method update flow so you can reconnect the account. Other payout methods you’ve saved, and other bank accounts linked to different payers, are not affected.

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Managing your payments

From your Payments Dashboard, you can:

• View payment history
• Update payout methods
  • Under “Payment method” click “See more” and edit your primary payment method.
• Manage tax information
• Download tax documents

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Downloading a payment receipt

You can download a PDF receipt for any payment you’ve received. The receipt includes the payment amount, transfer details, and a Reference ID, and is useful for recordkeeping or sharing proof of payment with a third party. To download a receipt:

1. Open the Received tab on your Payments dashboard
2. Select a completed payment to open the payment details
3. Click Download receipt (PDF)

The receipt is only available for completed inbound payments. Pending payments do not show the download option until the transfer has settled. _{Karat is a fintech company, not an FDIC-insured bank. Banking and Card services provided by Grasshopper Bank, N.A., First Internet Bank of Indiana, and Cross River Bank, Members FDIC.}