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by deftnerd 2438 days ago
You already mentioned payroll and vendors, so I think you're already thinking of what I'm about to suggest... and then I might try to talk you out of it.

When I think of business cryptocurrency financial stuff, I also think of those things. Employees need to be paid, and they might want their paycheck in crypto or in fiat, or a combination of the two. Vendors that need to be paid will usually just want fiat, either through some kind of fiat electronic transfer, or a "bill pay" check that's printed and mailed.

The problem is that payroll is HARD. That's why banks, who handle business accounts, don't do payroll and it usually falls onto specialist companies. Given the "global" nature of cryptocurrency, many of your customers will likely have employees spread across the world, which also adds payroll complications when it comes to withholding, legality of cryptocurrencies, etc.

You might want to just partner with a payroll company otherwise you'll find that most of development (business, software, and legal) will end up being sucked into that blackhole side of the business that doesn't even have a high margin.

Paying vendors? That's relatively simple in comparison. That's why most banks DO provide bill-pay and transfer services.

What I suggest for your "secret sauce" is being very internal bureaucracy friendly and give out employee corporate debit cards freely.

Build your system so when a business signs up, they can make accounts for all their employees and managers and set up authorization workflows. If Bob in accounting wants to buy a new chair, he should be able to submit the request for the funds. If it meets various criteria (ex: less than $500, only needs manager approval and not department head approval) and gets approved, then your system makes the cost of the chair (plus some buffer) available on Bob's wallet which has a linked Multis debit card.

If the business only provides debit cards to managers and up, then it would make the funds available to the managers crypto wallet (and associated Multis debit card) so they can purchase Bob's chair.

Lastly, if you put in place this support of business organization structure, use the same structure for the multisignature systems. One of the signatures could be Bob's manager, or maybe it would require the manager and the department head, etc... But not Bob and his wife, who happens to be a manager in an entirely different department at the business.

I've done crypto work before, and also have recently build a "corporate bureaucracy friendly" authorization system for a SaaS I'm working on so putting those two experiences together seemed natural :-)

2 comments

hey thanks for sharing your thoughts :)

agreed, payroll is hard - we actually mean only the payment part of payroll right now. we'll experiment on ourselves first by paying salaries in fiat+crypto to get a better idea of all the implications.

paying vendors is simpler indeed, and it's even better with crypto because you pay low fees (and not based on the amount you're sending)

we're totally aligned with what you're saying about the "secret sauce" - we actually released a feature called "direct transfers" that aims at doing that (except that it's not with a card atm) https://medium.com/multis/introducing-direct-transfers-a-new...

we need to go deeper in this "corporate bureaucry friendliness" though and have more levels (right now only owners/guests)

cool to see that you get what we're trying to do :)

Oh, here's a random idea that might integrate with your business model.

Some companies like to offer profit sharing. You could support that by allowing the company to issue a token of some kind to employees on a regular basis as part of their pay check or manually as a bonus.

Either the ownership of their tokens could make them eligible for proportionate distribution of profit share payouts (during the holidays, or whatever) or the token itself could hold the value and the employee could convert it to another crypto when they want to cash out.

interesting! that would be some sort of continuous employee stock-option plans
Basically, but I would consider checking with your legal council on the exact terminology that you use to make life easier :-)
Payrolls are done by accounting, but they use an interface to the bank to make the actual payments. It's usually a CSV file or similar, which is uploaded by the accounting software, and has just the amounts and account numbers. Checks are not used outside of USA.
Having worked at ZenPayroll in the early days, I can say with confidence that this is not true. Payroll is not handled by accounting software and it sure as hell is not uploading amounts and account numbers.

As for paying people in crypto, we considered it (I was the engineer working on it) and then we decided against it because it’s a terrible idea.

1. Crypto transactions aren’t reversible so reversing fraud is impossible.

2. Users don’t fully understand how blockchainy things work. Providing customer support to explain wtf any of it means would be a nightmare.

3. Users can’t use crypto for anything. I mean maybe buying illegal things on DarkNet markets but other than that the entire blockchain ecosystem—billions of dollars of investment—has yet to build a single usable product solving a real problem.

4. Currency changes value all of the time. What if someone can’t pay rent because they were paid in Internet coins that lost value in the time between their pay period and the end of the month? They’re just…kind of fucked? And again, most people don’t really understand what’s going on here so “it’s their fault” is a very uninteresting response. Don’t set people up to make poor decisions with ramifications they don’t understand, even if we can absolve ourselves of theoretical accountability on Internet forums.

5. In the US you can’t pay people in whatever you want. These regulations exist for good reason, back from when companies would try to pay people in store credit. Is blockchain whatever a real currency or a narrow utility that locks people in? Legally it’s a grey area (or was when we worked on it.)

Overall, it’s just a terrible idea. No one is sitting at home thinking, “damn, I wish I could be paid in blockchain.” I mean, they kind of where when crypto was going up and up and up and it was some speculative get-rich-quick pump and dump, but not anymore. (And anyway, we maybe shouldn’t encourage people being paid in speculative coins with no real-world uses? I don’t know.)

1. Was fraud a big issue at ZenPayroll? I would assume this to be an issue for fortune 500 companies, not smbs

2. We're helping crypto companies for now - they get it. Hopefully non-crypto people will get it too as crypto becomes mainstream :)

3. e-merchants like Rakuten started accepting crypto. Amazon could follow. Consumer apps offering higher interest rates than traditional banking could also be compelling

4. You're right! that's why we're bullish on stablecoins like USDC or DAI - value is pegged to USD

5. Still grey, but moving fast - you can now pay people with bitcoin as long as they get minimal wage in USD. Paying bonus in crypto is an interesting use case

Fraud isn't something you can worry about after the fact. There are strict regulations around anti–money laundering and counter-terrorism that are less about de-frauding an SMB then spinning up fake businesses and using payroll as a conduit. The challenge with blockchain payments in payroll is anonymity and irreversibility (two of its significant differentiators.)

At that point, what are the benefits? Transaction speed is one, but you only really get that if the business pays in crypto (otherwise you still need to wait for the ACH payment from them or float the money (don't float the money.))

- Is crypto really different from cash for this? Plus anonymity seems relative now as agencies like Tracfin can track back addresses.

- Our users generate revenues in crypto. Paying employees with it is just convenient, faster, and cheaper when part of their staff is abroad.

> Payroll is not handled by accounting software

In many countries it is. Never understood what makes payroll so complex in the US that justifies another layer.

we're also considering leveraging other crypto products for salaries https://sablier.app/