Californian startup Bitwage has launched the beta version of its new service, dubbed Bitcoin Payroll for the Individual, that will allow its employees to receive part of the salary in digital currency.
The company’s main competitor BitPay has earlier announced that payroll services providers Incoin and Zuman started using its payroll API.
Bitwage chief strategic officer Jonathan Chester noted that the new BP(i) offering differs from the bitcoin payroll solutions that are now available on the market. He considers the new solution will facilitate bitcoin mainstream adoption.
Although many traders have already integrated bitcoin, it is still challenging for digital currency users to obtain bitcoin.
Chester said: “One of the good things about the system is that, unlike a lot of other wallet providers and exchanges, you’re trusting them to hold on to their bitcoins. We’re just a conduit to make it so USD will flow into whatever wallet you chose.”
The solution is now available to W-2 and 1099 workers in all 50 US states.
To enroll in the service, Bitwage users need to first contact their employer or payroll provider to list Bitwage’s corporate account as a secondary account for wage payments. Users thereby authorize part of their paycheck to be transferred to Bitwage, converted to bitcoin and sent to their wallet of choice.
“What users are doing is … setting the percentage of what they want to be in one bank account versus the other,” Chester said. “They can say they want 10% or 50% of their paycheck in bitcoin, and then pick their wallet of choice.”
On the day of payment, the funds are sent through direct deposit from the employer to the employee’s Bitwage account. Then the transfer is sent to Bitwage’s partner exchange Buttercoin and remains on the exchange until the next day. After that, the money is converted to bitcoin and then sent to the employee’s account.
Bitwage is working on improving the service and plans to accelerate the payment process of BP(i), which is holded up by the slow speed of the automated clearing house (ACH) payment services. The company uses the service to transfer money from traditional bank accounts.
The company is now offering the solution for free in beta version.
“In the future we will be partnering with more than just one exchange, to go with the best exchange rate for our clients off of all those exchanges,” Chester said.
However, Bitwage may include the fees for payroll service users, although the of monetization is in its early stage.
Earlier this year, Bitwage conducted a survey, which showed that 47% of bitcoin firms are open to the idea of paying their workers in cryptocurrency.