What is the Tiney Wallet?
When a Childminder is registered with tiney, the Childminder is invited to set up their Tiney Wallet. The Tiney Wallet is a UK regulated E-Money account, held legally in the Childminder’s name.
To set-up and manage these E-Money accounts, tiney works with a firm called Modulr FS Limited, who are an FCA-regulated E-Money Institution (EMI).
These accounts are E-Money accounts, not bank accounts, and as a result are subject to certain limitations. You can read more about how E-Money accounts work in Modulr’s FAQs here.
Tiney can manage these accounts, but any funds held in them are legally safeguarded in the Childminder’s name. This safety net is designed so that if something were to happen to Tiney or Modulr, the funds within these accounts would be legally safeguarded in the name of the Childminder. There is more information about how this works here. This is a requirement of the FCA (the UK Payments Regulator) for firms like Tiney who process payments on behalf of their customers.
As part of the setup of the Tiney Wallet, the childminder must agree to the Modulr Introduced Client Terms. They do this via the Tiney App as part of the “Set up your Tiney Wallet” post-registration trading task.
How does Tiney process payments from parents/guardians on a Childminder’s behalf?
Tiney works with a number of third party Payment Providers to enable Childminders to receive payments from Parents/Guardians.
These payment providers include Stripe (for credit/debit card payments), HMRC’s Tax-Free Childcare (TFC), a variety of Childcare Voucher schemes and the Student Finance body. The list of supported Payments Providers are always being updated as new schemes become available.
When a payment arrives from one of these schemes, Tiney uses a variety of methods to identify which Childminder the payment is for. In most cases, this happens automatically.
When the Childminder for whom this payment is destined is confirmed, Tiney reconciles the payment against an open invoice for that Childminder, and the full gross amount of the original payment is transferred to the Childminder’s Tiney Wallet (see ‘What is the Tiney Wallet?’ above).
For payments that can’t be confirmed automatically, the Tiney Payments Operations team will attempt to manually determine the destination Childminder and associated invoice for that payment. In most cases, this happens within 1 business day, and our maximum turnaround time is 2 business days.
Where there is no matching invoice, Tiney’s Payments Operations team will attempt to verify the validity of these funds, and where necessary create a matching invoice for them to be reconciled against. This step is necessary to meet our compliance requirements to Modulr and the FCA surrounding anti-money laundering (AML) and the verification of source of funds. You can read more about these AML requirements that Tiney must follow via Gov.uk.
How does Tiney work with Local Authorities to process payments for Funded Childcare Placements on a Childminder’s behalf?
Tiney operates two models for working with Local Authorities, depending on the LA’s preference:
Tiney-Led:
In these Local Authorities, Tiney holds the relationship with the Local Authority directly. Funds are paid directly to Tiney, and Tiney then distributes the funds to the Tiney Wallets of the childminders who delivered funded childcare. (See ‘What is the Tiney Wallet?’ above.)
In these cases, the original payments are made by the Local Authority to an E-Money account held in Tiney’s name, much like the parent/guardian payment schemes (see ‘How does Tiney process payments from parents/guardians on a Childminder’s behalf?’ above.)
On receipt of funds into these accounts, Tiney’s Payments Operations team splits and reconciles the payment to the Childminders that deliver funding in that Local Authority, according to the individual hours that have been contractually agreed by those Childminders and Parents/Guardians, of which Tiney has full visibility.
As above, the full amount of the payment is always transferred to the Childminder’s Tiney Wallet before any associated Service Fee is then paid by the Childminder to Tiney. The Service Fee is paid as a separate transaction, occurring subsequent to the successful receipt of the full gross amount of the Local Authority Funding Payment into the Childminder’s Tiney Wallet account. (You can read more about this in ‘How and when does tiney charge its fee to Childminders?’ below.)
2. Provider-Led:
In Provider-Led Local Authorities, each Tiney Childminder is registered individually with their Local Authority to deliver funded childcare places.
In these Local Authorities, the Childminder has the option to choose for the Local Authority to pay the fees for funded placements directly into the Childminder’s Tiney Wallet, which is an E-Money Account, legally held in the Childminder’s name and provided by Modulr FS Limited. (See ‘What is the Tiney Wallet?’ above for more information.)
In this case, Tiney makes a Sort Code and Account Number of the Tiney Wallet available to the Childminder for them to provide to the Local Authority to make payments to. This Sort Code and Account Number is unique for that Childminder to use for Local Authority payments, and is not used by Tiney for any other funds, or shared between Childminders. (Note that Tiney advises the Childminder not to reveal these account details to anyone other than their Local Authority, to avoid any risk of funds being transferred to the account which cannot be verified.)
When payments are received from Local Authorities to the Childminder’s Tiney Wallet, via the Sort Code and Account Number provided, Tiney will attempt to match those funds to an open invoice for Funded Childcare for that Childminder.
Where there is a matching invoice available for funded childcare associated with that Childminder, then these funds will be immediately made available for the Childminder in their Tiney Wallet, and the subsequent Tiney Fee payment will be triggered (see ‘How and when does tiney charge its fee to Childminders?’ below).
Where there is no matching invoice, Tiney’s Payments Operations team will attempt to verify the validity of these funds, and where necessary create a matching invoice for them to be reconciled against. This step is necessary to meet our compliance requirements to Modulr and the FCA, surrounding anti-money laundering (AML) and the verification of source of funds. You can read more about these AML requirements that Tiney must follow via Gov.uk.
In all cases where there is no fraud or money laundering suspected, any funds transferred to the Childminder’s Tiney Wallet will be reconciled and made available to withdraw within 2 business days. In cases where we are unable to identify the source of funds, Tiney will always contact the Local Authority, and will return funds if necessary.
How and when does tiney charge its fee to Childminders?
When a payment is successfully reconciled against a childminder’s invoice, the full gross amount of the original payment is transferred to an E-Money account in the Childminder’s name, known as the Childminder’s Tiney Wallet (see ‘What is the Tiney Wallet?’ above).
On successful completion of this payment, a subsequent transaction is triggered in which the Childminder pays tiney the Service Fee that is due, which is usually calculated as a % of the original payment that they have received into their Tiney Wallet account. (N.b. in some cases, for certain childcare placements, this fee is waived - see below.)
The tiney service fee is agreed with the Childminder as part of their original Training Offer, and for new Childminders is currently set at 12% of their total childcare earnings.
This fee is paid by the Childminder to Tiney in exchange for the broad variety of services that Tiney offers as part of being an Ofsted Registered Childminder Agency, which includes (and is not limited to) training, background checks, ongoing continual professional development, webinars, access to the tiney app, professional community, support with contracts, insurance and payments.
The Tiney Service Fee is a blended fee that covers all of these service elements together, and as such there is no specific fee for the processing of payments aspect of the service alone.
The Service Fee is paid from the Childminder’s Tiney Wallet to a separate E-Money account held in Tiney’s name. Childminders agree to pay this fee automatically on receipt of Payments into their Tiney Wallet as part of the Provider Terms of Use.
Note that there are some types of childcare placement for which Tiney currently waives its service fee, and these currently include the 3 & 4 year old Local Authority Funding Bands (see here for full details).
Is Tiney compliant with the Local Authority statutory guidance relating to Funded Hours?
We have had clear guidance from the Department for Education that:
“The guidance is not intended to prevent CMAs [Childminder Agencies] from making separate arrangements with providers regarding the charging of fees, for example through invoicing them a % fee on entitlements funded hours.”
We are confident in our approach being compliant with these guidelines due to the clear separation of the transaction to the Childminder of the full gross payment amount, followed by the separate issuing of Service Fee payment from the Childminder to us. Childminders may request Paid Invoice Receipts for these fees via the Tiney Customer Service team.