Visa and eTip Team to Help Hospitality Workers Get Tipped Faster

Visa has teamed with eTip, a digital tipping platform for the hospitality and service industries.

The collaboration is designed to help deliver funds directly to participating digital wallets in real time, the companies said in a Monday (June 16) news release.

This will let service industry professionals quickly send funds to apps such as Venmo and PayPal without having to wait multiple business days to get their earnings, the release added.

“At eTip, we believe service workers are the backbone of the economy, and they deserve a fast, transparent, and accessible way to manage their earnings,” said Nicolas Cassis, co-founder and CEO of eTip.

“With cash transactions declining, it’s critical that tipping evolves to meet the needs of today’s workforce.

“Our integration with Visa Direct makes it easier than ever for workers to access their hard-earned money quickly, empowering them with financial stability and control. By removing barriers to financial security, we are helping to ensure that tipping truly serves the people who rely on it most.”

The release said eTip’s platform is used by some of the world’s most well-known companies in hospitality and other sectors, with businesses using eTip reporting an average 95% increase in tip frequency, with workers receiving tips five times more often than before.

In integrating with alias-based payments via Visa Direct, eTip is ensuring workers can benefit from their added earnings as fast as possible, the companies said.

The partnership comes amid a changing tipping landscape in the U.S. As PYMNTS wrote last month, recent legislation passed in Congress eliminates federal taxes on tips, which will likely serve as “further tailwind” for tips to be paid digitally and not in cash.

“For restaurants, hotels and a host of other businesses, the daily divvying up of cash tips, parceled out to shift (and other) workers has become a mainstay of take-home pay,” that report said. “The onus has been on workers and employers to report those cash tips on tax filings, since tip-related income is treated as, well, income.”

Current policy, per the IRS, requires employees to keep a daily tip record; report tips to the employer, unless the total is less than $20 each month per employer; and list all tips on an individual income tax return.

Under the new legislation income derived from tips paid out in hard currency or using credit and debit cards would be exempt from federal income taxes. The income would be subtracted from “above the line” gross income, which in turn reduces taxable income.