We know many developing countries have leapfrogged certain development stages thanks to rapid adaptation to evolutions in technology. This is one of the main reasons why internet in Silicon Valley is slower than in Romania, Lithuania and Hong Kong, with the latter topping 2014 speed charts according to the most recent Ookla Global Net Index. This is also why people in Africa connect to the internet more often with a mobile phone than their computer.
Jonathan Chester, founder of BitWage, sees the role of BitWage in bringing modern banking tools to this emerging segment of electronic money users.
Cointelegraph: Glad to meet you, Jonathan. So, please, tell our readers what BitWage is and how started.
Jonathan Chester: Right now our service is Bitcoin payroll. We originally created BitWage because we saw Bitcoin as a modern financial tool to connect the global population of the unbanked. Right now, the main way to get Bitcoins is by linking a BIC (Bank Identifier Code) to a Bitcoin provider. We are trying to figure out how to solve this issue in a scalable way.
CT: What inspired you to start BitWage?
JC: I first heard about Bitcoin a couple of years ago and first dismissed it as another fake currency. I think most people make that mistake. I ended up watching a TED talk on the future of currency and I came out of it saying: ‘I need to know everything I can about Bitcoin.’ I started reading about it, found the white paper and immediately fell in love with the idea.
At that time I was working at Oracle and one of my co-workers John Lindsey came to me with his idea and said: ‘Hey, there is a missing link in the current financial circle - Payroll. If Bitcoin is to be popular, payroll is eventually going to be part of it.’ The idea made sense to me and I said: ‘Alright, let’s get going, let’s do it!’
We started turning that idea into reality in October-November 2013 and the first aspect of our product came out in July 2014. Originally it was only for 1099 contractors, but now we can actually work with W2, which is cool because in our system you don’t actually need to get your employer to change their entire payroll, just agree to offer Bitcoin payroll. We are currently working with customers who are using payroll providers such as ZenPayroll, Trinet and Quickbooks. However, our system interfaces with most payroll providers.
For companies who do want to change their payrolls, we announced a partnership opportunity on Reddit. It was a soft announcement with Gocheto Financials LLC, which is a New York-based payroll brand. We have exciting partnerships building, so if you want to move your system to Bitcoin completely or you do not have a payroll system yet, we’re happy to set you up.
CT: As companies unrelated to Bitcoin in emerging markets (and countries nearing financial default) have high incentive to pay wages using Bitcoin are these the markets where you’re centering your focus?
JC: In the US alone, there are 21m unbanked households and over 100m people who are underbanked. While we are very focused on the international regime, we are still sensitive to the problems of the under and unbanked here at home.
Most people do not have a Bitcoin payroll solution. We have made it, and we have made sure to make it simple. Employers don’t need to know the in-depth nature of Bitcoin, they don’t even need to understand what private or public keys are, they just need to understand that they are paying their employees in a fast, easy fashion and they can do it all around the world.
CT: Does your product reflect hyper-intuitive design and a front-end interface similar to what employers are already used to working with?
JC: Yes, exactly. Here’s how it works. Employees go to their payroll provider and choose the percentage of their paycheck they want to go to their bank account (if they have one) and what percentage they want to receive in Bitcoin. Our product is employee-driven, the employer actually does not need to do anything. The employee can change their percentages on the fly, their wallet on the fly and they don’t have to engage with the employer to do this.
At BitWage we believe in privacy. In our case it is the privacy of people’s financials. With Bitcoin, you have a public address and you are now potential able to see all of someone’s financials - what they are buying and how much money they have to purchase. Many people don’t want their employers knowing what they are purchasing or how much money they have/administer, so we make sure to keep the employees public address separate from their name to make sure employers cannot see the public addresses of their employees.
To be clear, this is not only a privacy mechanism from the standpoint of employee to employer. There is also the notion that many employers may not realize what it means to connect a public key to a name. This implies the employer is not keeping it secure on their own and if a bad actor were to get their hands on that information, they would know how much money someone had, what they are spending it on, who it is and who to attack.
This is why we have built a system to allow the employer to not have to worry about this hazard. The whole idea is offering people ‘ease of use privacy’ to try and create more growth in the Bitcoin industry.
Moving forward, we will be recommending wallets to people and extending our reach past Bitcoin startups. To do this, we will enter into a process of intense education for our targets, which entails going into the field to explain the uses of Bitcoin and why/how it could be good to get paid in this form of value. It’s an investment.
We realize that a lot of these people will not understand many things, (e.g., wallets) so we will have recommended wallets for these people to simplify the process. They can go on the system, press a button and we will share information with the wallet provider so that they can create a wallet seamlessly.
CT: Are you partnering exclusively with any wallet company?
JC: Currently, no. We are in discussions with several different wallet companies and we’re leaning toward a model where we will provide a set of possible options to balance the ecosystem. However, we will analyze each product, reduce to a reliable shortlist and have one-liners explaining which one is particularly good for what and which wallet would best match for a certain user’s profile. We may also make a ‘super easy’ button for people who do not want to think about it. This is where an exclusive contract would come into play.
To keep you updated on the future, we will have a couple of products out pretty soon to keep your eye on.
CT: Very exciting, can’t wait for those updates. Are there any insights you can share about your new products?
JC: Well, the whole idea with these new products is to empower people and give more use-cases for Bitcoin in terms of saving, investing, budgeting and other forms of value storage and growth. I cannot really go too far into the details but keep your eyes peeled.
CT: Has anyone reached out to you with a story of how your business has directly impacted their life?
JC: Yes. Right now one of our employers is a media company that doesn’t have anything to do with Bitcoin. They are creating software that helps you analyze traffic on your site. This company has a contractor whom they pay in the UK and we allow them to pay this contract faster, easier and simpler because of Bitcoin.
We are building an international payroll with end to end transparency. This system is going to make payroll cheaper for everyone so the employee gets more money, employer saves more money and everyone saves time.
Previously, companies had to go to MoneyGram or Western Union to pay their international employees and they can now do this straight through their payroll provider.
CT: What can the world expect to see from you in the near future?
JC: As I mentioned earlier, we see Bitcoin as a way to provide the currently unbanked with an easy pathway to financial tools that they did not have access to before. Our core focus is here, so in the near future we will continue looking at new products coming out and keep answering the question: ‘How do we actually give these modern tools such as saving, budgeting and investing mechanisms to people all around the world who currently don’t have access to financial empowerment?’
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