Bitwage is a service founded in 2013 which allows customers to receive all or part of their payroll in Bitcoin. Any Bitwage user around the world can have his/her monthly wage – or at least a part of it, depending on your preference – converted to Bitcoin automatically. The best part is, it is all automated so you don’t have to do any extra work. Below are a few questions we asked Jonathan Chester, founder and president of Bitwage:
When and what inspired you to come up with the idea for bitwage?
The idea for Bitwage came about in late 2013. I previously used to work for Oracle in Sales, leading the open source support inside sales division in Kansas and Iowa, and was looking into new technologies and trends. It was around August of 2013 that I first started seriously looking into Bitcoin. It was fascinating. I was absorbed by the potential to provide financial services to the $2.5bn unbanked while also working with a far more efficient payment system. After about a month of digging in, I had become “that bitcoin guy” at work. Turns out there was another “that bitcoin guy”, my co-founder, John Lindsay. We got together and started thinking about what was missing in the bitcoin ecosystem. John realized that no one was doing anything in the payroll space, a large area in the financial industry, and so we decided to be the first movers. We first released our bitcoin payroll for employers product in July of 2014. Then in November, we released our Bitcoin Payroll for Individual product, which allows anyone to receive any percentage of their wages in bitcoin without their employers signing up. Then in February of 2015, we released our first end to end international payroll solution, from the US to the Philippines. We now have payouts in Brazil, Mexico and Europe and well.
Have you faced any regulatory issues regarding money transmission laws? Since bitwage isn’t exactly an exchange does it qualify as a money business service?
Payroll services are a little unique in the united states. On a federal level, payroll services fit under the same exemptions as payment processors with the Financial Criminal Enforcement Network, the main federal regulatory body for financial services. Although each state is different, for the most part, payroll companies and services are exempt from state licenses. For instance, if you look at the list of money transmitters in California and New York, you will notice that there is only one payroll company with a license and that is ADP. You won’t find Paychex, Ceridian, Trinet, ZenPayroll or others on there. ADP just happens to offer other banking-like services that require a license.
Have you thought of adding options for receiving payment in other coins?
We are constantly looking into new features to add. In terms of outputs, we are constantly adding new local currencies to payout into. For instance, we are looking into adding Chinese Yuan and Indian Rupee. That being said, we also allow people to receive their wages in precious metals, such as gold and silver.
What’s the most important thing you’re working on right now, and how are you making it happen?
While our bitcoin payroll for the individual solution is very strong and we do not see this waning anytime into the future, this system is already mostly built and does not need many more improvements.
For us, the most important system is our international payroll system. The average cost of sending payrolls across borders is 8% and on average takes up to 3 to 5 days. This can be really hard for employees, freelancers and contractors to have to cope with. When you throw into the mix the fact that your funds may get lost in transit, it just becomes a poor process.
We see Bitcoin as a way to remove these issues out of the payroll process, bringing efficiency and peace of mind into the entire process. We are building full wraparounds into our bitcoin process, so people do not have to directly interact with Bitcoin if they do not want to. This means employers, employees and freelancers can harness the efficiency of bitcoin while interacting with their everyday currencies. With our cloud savings solution, we are even able to bring unbanked workers into the global digital marketplaces without them needing to deal with all the fees associated with the banking system.
Do you remember how you got your first customer?
I do. It was a mix of cold calling, in person meetings and building out a proposal. Our first customer was actually an employer since our individual payroll solution was not out yet.
I remember the moment the funds first hit the account. Because of how the ACH system works, the funds came in at Midnight sometime in August. I was out drinking a beer with a buddy who was still working at Oracle when the funds hit. Needless to say, I have a picture of the event.
Where do you see bitwage in 3-5 years?
In 3 to 5 years, Bitwage will have a full, end to end payroll system that starts when an employer receives their funds and ends when employees want to send those funds out, whether it be directly to their bank accounts or through one of our provided debit cards. Built into this will be a powerful international payments system that will allow anyone to send payrolls globally in real time.
In hindsight was there anything you would have done differently if you could go back in time and start bitwage all over again?
I would be more lean. There were a few high expenditures and hires that were too early. Although we are now in a very comfortable position funds wise, we plan to be more lean with our funds, with most of it going out to development and compliance.
If you are looking to expand your portfolio and accumulate bitcoin, Bitwage is a great service to accomplish that task seamlessly. If you an employer there are a few reasons to offer payroll in bitcoin. Many IT specialists want to get paid in bitcoins, payment in bitcoin reduces cashing fees for unbanked employees, and many Millenials (18-34) agree that Bitcoin is a good investment. If you liked this article follow us on twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the hottest cryptocurrency news.