Show HN: Incoin.io – Bitcoin and Distributed Payroll(incoin.io)
incoin.io
Show HN: Incoin.io – Bitcoin and Distributed Payroll
https://www.incoin.io/
7 comments
Hey! Tony here from Incoin. You're right in that taxes are the hardest part. We're only launching in California and are working hard in compliance for this state to get this working.
The biggest and newest part about Incoin, though, is payroll distribution. You can split your wages up amongst any of your savings, checkings, and bitcoin accounts for free.
Say you want 80% in checking, 10% in savings, and 10% in bitcoin — that's possible for you to configure as an employee. And the employer doesn't have to touch a thing; we handle the entire distribution and BTC aspect (and trust me, running BTC payroll manually is horrible).
We're hoping this is great for both increasing the amount of money that people save and increasing the uptake of BTC.
The biggest and newest part about Incoin, though, is payroll distribution. You can split your wages up amongst any of your savings, checkings, and bitcoin accounts for free.
Say you want 80% in checking, 10% in savings, and 10% in bitcoin — that's possible for you to configure as an employee. And the employer doesn't have to touch a thing; we handle the entire distribution and BTC aspect (and trust me, running BTC payroll manually is horrible).
We're hoping this is great for both increasing the amount of money that people save and increasing the uptake of BTC.
Rather than having this tied to my employer, and requiring reconfiguring if I ever leave them, wouldn't it be a better idea to just get the money in one lump sum from my employer, and handle this kind of detail myself?
We had exactly the same thought. We're working on a new feature so you can sign up independently from your employer, too. It's not quite ready and there's more legal matters to consider, though it's in the pipeline.
The distribution sounds like a genuinely cool feature so I don't want to take away from that... but it seems one must buy payroll as a complete package. We couldn't even consider a solution that isn't able to do all our taxes and bonus payments.
You're right. We understand that and are offering our beta customers help doing the tax portion of things. We still have a lot to do, but we're just getting started!
According to their faqs: http://blog.incoin.io/incoin-faqs/
Those are all problems that they have yet to solve.
They only support salaried employees (no hourly employees). Taxes should be done in 1.5 - 2 months, and bonuses are in their roadmap, but there is no timeline for that feature.
They only support salaried employees (no hourly employees). Taxes should be done in 1.5 - 2 months, and bonuses are in their roadmap, but there is no timeline for that feature.
There are Bitcoin related startups which are run by people with no experience in either finance, cryptography, or security. Hopefully you guys are very strong in this background. I don't see any personal profiles on the site. Codelitt Incubator has no names either which is even more concerning.
You're right. We should probably put our profiles up. We get busy with product(s) and we tend to not focus on talking about ourselves as much as we probably should. We're admittedly not the best at marketing or PR. We'll put some stuff up soon.
RE security - we don't actually hold any bitcoin and our ACH provider handles transactions; we're trying to steer clear of all major security issues by avoidance. We've put a lot of effort into securing any data we do have, though, and we've also got a great compliance and legal team working with us for the finance issues
RE security - we don't actually hold any bitcoin and our ACH provider handles transactions; we're trying to steer clear of all major security issues by avoidance. We've put a lot of effort into securing any data we do have, though, and we've also got a great compliance and legal team working with us for the finance issues
I see a total lack of understanding of currencies in most of BTC-related startups.
For example a bitcoin based payroll is like giving away shares (less volatility of course, but you get the point). If someone would work for shares, he probably will (think about) accepting bitcoin as payment.
In Silicon Valley people takes risks easily, but in Europe I think no one in their right minds will wanna do this.
Payrol automation on the other hand, especially for software companies makes a lot of sense.
For example a bitcoin based payroll is like giving away shares (less volatility of course, but you get the point). If someone would work for shares, he probably will (think about) accepting bitcoin as payment.
In Silicon Valley people takes risks easily, but in Europe I think no one in their right minds will wanna do this.
Payrol automation on the other hand, especially for software companies makes a lot of sense.
I don't know quite what you are referring to. Giving away shares of stock in any public company could possibly be compared to it because they're liquid like BTC is. BUT I don't see it as being similar to giving away shares of a private company which are not very liquid.
The risk of getting paid in BTC does exist as far as price volatility, but it's not a far cry away from being paid in cash being as it's liquid and many merchants accept it as payment.
The risk of getting paid in BTC does exist as far as price volatility, but it's not a far cry away from being paid in cash being as it's liquid and many merchants accept it as payment.
Nope, but while a currency is designed to devalue BTC if doesn't crash IMHO is highly unlikely to devalue since it's a finite non-controlled currency.
USD on the other hand devalues over time by design. So these two currencies are designed in totally different style and both wouldn't exist if they hadn't been designed that way (USD to devalue over time and BTC to increase value over time).
USD on the other hand devalues over time by design. So these two currencies are designed in totally different style and both wouldn't exist if they hadn't been designed that way (USD to devalue over time and BTC to increase value over time).
Right. But with our system, the employee's wage/salary is entered as USD. We purchase BTC at the time that payroll is ran at the current price.
So assuming that the employee isn't going to spend it and that BTC is forever increasing in value over time - the employer isn't giving away a valuing asset because they purchased it and gave it away within a few moments while the employee gets the benefit of a valuing asset. I don't think anyone would complain about that.
So assuming that the employee isn't going to spend it and that BTC is forever increasing in value over time - the employer isn't giving away a valuing asset because they purchased it and gave it away within a few moments while the employee gets the benefit of a valuing asset. I don't think anyone would complain about that.
First of all, this is an awesome idea, and I can tell you from personal experience that payroll automation is still gaining momentum in the California small business community.
I noticed you chose ZenPayroll's pricing model, without having all the features of ZenPayroll. The most important ZP features are automating tax filings, both quarterly and yearly. Also, contractor payments and integration to FreshBooks. These are all the essential ingredients of a payroll solution- the bitcoin aspect is cool but I don't really care much about it.
I noticed you chose ZenPayroll's pricing model, without having all the features of ZenPayroll. The most important ZP features are automating tax filings, both quarterly and yearly. Also, contractor payments and integration to FreshBooks. These are all the essential ingredients of a payroll solution- the bitcoin aspect is cool but I don't really care much about it.
Thank you for the support! And thank you for your feedback.
We do have some stuff that ZenPayroll currently doesn't have such as the btc (which you mentioned) and our paycheck distribution which allows for employees to automatically take their paycheck into any number of bank accounts/bitcoin wallets.
RE integration: Yes. We realize that the taxes is a huge part. Currently we're offering a free month and plan to have tax deductions integrated before actually charging customers. You'll notice now, there isn't even a spot to enter your billing details for using the service. It's currently free.
The other stuff you mentioned is in our roadmap. We're just getting started and plan to add much more.
We do have some stuff that ZenPayroll currently doesn't have such as the btc (which you mentioned) and our paycheck distribution which allows for employees to automatically take their paycheck into any number of bank accounts/bitcoin wallets.
RE integration: Yes. We realize that the taxes is a huge part. Currently we're offering a free month and plan to have tax deductions integrated before actually charging customers. You'll notice now, there isn't even a spot to enter your billing details for using the service. It's currently free.
The other stuff you mentioned is in our roadmap. We're just getting started and plan to add much more.
Hey there! Just to give some context from a ZenPayroll engineer:
ZenPayroll does have splits between multiple bank accounts[1]. You can split your net pay by amount ($100 in Account1, $200 in Account2, the rest in Account3) or by percentage.
Employees can even chose to donate a portion of their paycheck to any 501c3 in the United States[2].
Regarding BTC payouts, that's an interesting area, though currently runs into a number of wage laws. Many states necessitate that employees be paid in cash or cash equivalent. Bitcoin is not a cash equivalent (nor are more traditional value stores like gold.) Even ACH direct deposit had to be carved out as an exemption, to give some context on how strict these laws are.
It's great to see others diving into the payroll space. There is a great opportunity to help millions of small businesses.
[1] http://help.zenpayroll.com/customer/portal/articles/972807-e... [2] https://zenpayroll.com/blog/zenpayroll-giving/ [3] https://zenpayroll.com/api/v1/states
ZenPayroll does have splits between multiple bank accounts[1]. You can split your net pay by amount ($100 in Account1, $200 in Account2, the rest in Account3) or by percentage.
Employees can even chose to donate a portion of their paycheck to any 501c3 in the United States[2].
Regarding BTC payouts, that's an interesting area, though currently runs into a number of wage laws. Many states necessitate that employees be paid in cash or cash equivalent. Bitcoin is not a cash equivalent (nor are more traditional value stores like gold.) Even ACH direct deposit had to be carved out as an exemption, to give some context on how strict these laws are.
It's great to see others diving into the payroll space. There is a great opportunity to help millions of small businesses.
[1] http://help.zenpayroll.com/customer/portal/articles/972807-e... [2] https://zenpayroll.com/blog/zenpayroll-giving/ [3] https://zenpayroll.com/api/v1/states
Hey! I didn't know that you guys had splits! I stand corrected on that account. And apologies for the misrepresentation. We even signed up for your service when we were doing our research. Was this recent?
You're right about some states having certain laws around this. One of the biggest challenges of working in the US is that every state has a different money transmitting policy and every state has different labour laws.
We hope that even if we step on some toes, that we can move this forward. There are some incredibly cool concepts in how people get paid that Bitcoin could enable. We talked a bit about areas in the Bitcoin ecosystem and payroll in general we think we can push things forward in our launch post: http://blog.incoin.io/introducing-incoin-bitcoin-distributed...
You're right about some states having certain laws around this. One of the biggest challenges of working in the US is that every state has a different money transmitting policy and every state has different labour laws.
We hope that even if we step on some toes, that we can move this forward. There are some incredibly cool concepts in how people get paid that Bitcoin could enable. We talked a bit about areas in the Bitcoin ecosystem and payroll in general we think we can push things forward in our launch post: http://blog.incoin.io/introducing-incoin-bitcoin-distributed...
Nice to see some more people in the payroll space.
Very interested to hear how you are handling fraud/risk with bitcoin and with split payments (what happens when you need to clawback a payment half of which was made through USD/ACH and half through BTC?).
Very interested to hear how you are handling fraud/risk with bitcoin and with split payments (what happens when you need to clawback a payment half of which was made through USD/ACH and half through BTC?).
Thanks! We're not nearly where you are though. :)
We have a couple of things in place. When an employer is running payroll: they have 2 points to review (both employee and their payroll as a whole) the totals in USD, 2FA step, and then there's a countdown before payroll begins to run (which they can opt to rush if they so decide).
We have policies and tech in place to make sure that when we're distributing we can guarantee that payouts happen as we expect.
Fraud/risk - Bitcoin itself doesn't increase our fraud/risk. We follow a KYC process for all of the companies and employees on our platform. These are companies paying employees. These companies and employees are liable for their payroll taxes and income taxes and keep records of this for them. The employees themselves are responsible for maintaining their Bitcoin wallets. We verify that a wallet has a real address, but the risk for losing money forever if they enter the wrong address is the same as if they were transferring from one of their wallets to another using any other Bitcoin service.
We have a couple of things in place. When an employer is running payroll: they have 2 points to review (both employee and their payroll as a whole) the totals in USD, 2FA step, and then there's a countdown before payroll begins to run (which they can opt to rush if they so decide).
We have policies and tech in place to make sure that when we're distributing we can guarantee that payouts happen as we expect.
Fraud/risk - Bitcoin itself doesn't increase our fraud/risk. We follow a KYC process for all of the companies and employees on our platform. These are companies paying employees. These companies and employees are liable for their payroll taxes and income taxes and keep records of this for them. The employees themselves are responsible for maintaining their Bitcoin wallets. We verify that a wallet has a real address, but the risk for losing money forever if they enter the wrong address is the same as if they were transferring from one of their wallets to another using any other Bitcoin service.
> Bitcoin itself doesn't increase our fraud/risk
Yikes, I disagree highly. You are operating a service that allows people to transfer USD from bank accounts into a relatively untraceable, irreversible currency. You will absolutely become, if you are not already, a big target for fraud.
The most common pattern we see is people trying to pay other bank accounts using a stolen bank account number. I don't think your ACH provider will care if the money is in bitcoin if you did not have authorization to pull that money in the first place.
All I'm saying is, your KYC process can and will fail, make sure you know your liability to your ACH provider/bank.
Yikes, I disagree highly. You are operating a service that allows people to transfer USD from bank accounts into a relatively untraceable, irreversible currency. You will absolutely become, if you are not already, a big target for fraud.
The most common pattern we see is people trying to pay other bank accounts using a stolen bank account number. I don't think your ACH provider will care if the money is in bitcoin if you did not have authorization to pull that money in the first place.
All I'm saying is, your KYC process can and will fail, make sure you know your liability to your ACH provider/bank.
Thanks for the note, and the concern. It is an issue.
The risk I think you're saying is: if we charge a company with a stolen bank account and pay in bitcoin, it's irreversible. That's true. We're mitigating this — that's why there's an ACH chargeback period that we wait out. And why we verify bank account ownership before charging. These are standard KYC rules that we have to comply with before accepting a company on payroll, and charging bank accounts is all done on the company side. I hear that they might fail, but we're not allowing anyone to run payroll and pay out in high volumes (eg. 80+%) of BTC to start with until they've been manually verified.
We've checked this through our lawyers and via Fincen, and we're mitigating risks every way we can.
The risk I think you're saying is: if we charge a company with a stolen bank account and pay in bitcoin, it's irreversible. That's true. We're mitigating this — that's why there's an ACH chargeback period that we wait out. And why we verify bank account ownership before charging. These are standard KYC rules that we have to comply with before accepting a company on payroll, and charging bank accounts is all done on the company side. I hear that they might fail, but we're not allowing anyone to run payroll and pay out in high volumes (eg. 80+%) of BTC to start with until they've been manually verified.
We've checked this through our lawyers and via Fincen, and we're mitigating risks every way we can.
Yeah, sorry, I definitely don't mean to imply legal liability so much as financial liability. No one will really care legally (about you), you'll just be on the hook for the money.
As I said before, it's not a matter of whether or not your KYC process will fail, it's simply when and what happens after that. It sounds like you have your head in the right place, but I can tell you from experience that verifying bank account ownership and expecting the ACH chargeback period to be sufficient to protect you is not enough (for one thing a lot of banks are simply not great adherents of the ACH rules). You're essentially on your own, and you'll need to protect yourself, not just "follow the rules," if that makes sense.
> and charging bank accounts is all done on the company side.
I'm not sure what you mean by that.
Anyway, my contact info is in my profile and I'd love to chat more off-HN about this and compare notes against what you guys are doing.
As I said before, it's not a matter of whether or not your KYC process will fail, it's simply when and what happens after that. It sounds like you have your head in the right place, but I can tell you from experience that verifying bank account ownership and expecting the ACH chargeback period to be sufficient to protect you is not enough (for one thing a lot of banks are simply not great adherents of the ACH rules). You're essentially on your own, and you'll need to protect yourself, not just "follow the rules," if that makes sense.
> and charging bank accounts is all done on the company side.
I'm not sure what you mean by that.
Anyway, my contact info is in my profile and I'd love to chat more off-HN about this and compare notes against what you guys are doing.
We'll get in touch to discuss further for sure!
We do have measures in place to protect ourselves and we appreciate your comments. There's always more that we can do.
It's also worth noting that an employer and employee have given all of the normal KYC information and have connected bank accounts so while the BTC wallet is "anonymous" on the network, we can link it to a specific person. The danger is near the same level as someone getting the money via ACH and immediately withdrawing in cash. (Many banks immediately mark the deposit as not-pending).
I'm not saying that there's not risk. Just that the risks are fairly similar even though the network is different.
Also I think what Tony was saying about debits only company side, is that we're only debiting company accounts which does decrease the fraud level vs a situation where we allowed an a personal account to be debited and money sent somewhere.
We do have measures in place to protect ourselves and we appreciate your comments. There's always more that we can do.
It's also worth noting that an employer and employee have given all of the normal KYC information and have connected bank accounts so while the BTC wallet is "anonymous" on the network, we can link it to a specific person. The danger is near the same level as someone getting the money via ACH and immediately withdrawing in cash. (Many banks immediately mark the deposit as not-pending).
I'm not saying that there's not risk. Just that the risks are fairly similar even though the network is different.
Also I think what Tony was saying about debits only company side, is that we're only debiting company accounts which does decrease the fraud level vs a situation where we allowed an a personal account to be debited and money sent somewhere.
Sounds good look forward to it. Btw I think I found a typo on your site:
http://www.codelitt.com/technologies A successful product requires lorem ipsum dolor sit amet in tenebris.
http://www.codelitt.com/technologies A successful product requires lorem ipsum dolor sit amet in tenebris.
Awesome and thanks for the heads up. We noticed it a while back and it got lost in the shuffle. We really should get that fixed though.
It would be rad to be able to pay in Bitcoin as the employer. Any thoughts there? It would help your model as you'd get to save trade fees by having an internal trading desk essentially.
Hey! Cody from Incoin here. It would be rad and it's in our roadmap. Employers currently do fund payroll in USD, but we're working on adding the ability to fund payroll in BTC. And you're absolutely correct. We would save in fees in a number of places, namely avoiding using our ACH provider.
Wouldn't it be an accounting nightmare for both employer and employee to pay with property instead of currency? I think the IRS declared that Bitcoin is property.
At some point the IRS may have to change their tune. The tax code is malleable even though it does require Herculean effort to change. Cryptocurrency and more generalized blockchain platforms such as ethereum could provide leverage to change minds if they could begin to demonstrate their value on the fraud prevention front to regulatory agencies. I work at a nonprofit startup focused on creating systems for pooling and streamlining the administrative overhead for nonprofits, and we consistently find that the regulatory obstacle course nonprofits are faced with is related to a fundamental problem of trust created by a few bad actors. A "triple entry" linked accounting platform built on the blockchain as described at https://medium.com/the-block-chain/creating-the-everything-l... could radically alter the nonprofit sector by making fraud much harder to do, though getting a critical mass to adopt it would be challenging. Not to mention the underlying engineering challenge.
Amazing answer and awesome link. That would be a massive boon. What startup do you work for?
The company is called ArtsPool (http://artspool.co). I use the term startup rather loosely, though. We have modeled ourselves on startups because we admire how startups operate and want to inspire nonprofits to learn from some of the efficiencies in other sectors, but our goal is not to make a profit. We are organized as a member-owned LLC where any surpluses from cost savings return to the members, so essentially we are a more like a co-op designed to separate certain administrative concerns from mission-related activities.
I get what you mean.
Impressive. What kind of tools do you guys have in the works? How is the compliance toolkit working out?
Impressive. What kind of tools do you guys have in the works? How is the compliance toolkit working out?
The compliance toolkit is going well though as I'm sure you know from working on payroll, it isn't easy to get users to embrace something related to an area that they usually associate with pain (even if it reduces that pain). For now it's just focused on New York but we plan to open source it for other states later in the year. We are also looking at some of the trouble spots in accounting and payroll such as automating the allocation of expenses/payroll across programs and projects, which is essential for nonprofits but time consuming and error prone. I'd be interested to see you expand your idea of allocation-based payroll to the employer side as well. No one does this but every nonprofit needs it.
That's interesting. You'd be interested in seeing employers receive payment from customers that's allocated/split? Or can you expand on that a bit? Feel free to email me at cody [at] incoin.io if you'd like to discuss more.
Well, if you're compliant in the US right now, you are keeping track of the value of every coin anyway. My own experience is that not many companies are doing this -- at CoinLab it was a very large effort, and included head-scratching conversations with accountants as to whether or not specific identification vs FIFO/LIFO was most appropriate.
So, yes, pain in the ass, however, one that you incur whenever you spend coins if you're compliant.
So, yes, pain in the ass, however, one that you incur whenever you spend coins if you're compliant.
You're absolutely correct. It will be difficult for them. It will be even more difficult depending if they've just purchased the coin or have held it for a while.
So is this like http://wagepoint.com/ that does bitcoin too?
It does have some similarities, but we put the majority of the control in the employees' hands. This not only makes the employer's lives easier, but also allows the employee to update how their paid at any point in time.
This is of course empty until it's fulfilled, but for what it's worth - we have a lot in our roadmap that will also set this apart in a lot of ways.
This is of course empty until it's fulfilled, but for what it's worth - we have a lot in our roadmap that will also set this apart in a lot of ways.
Just a quick check in from Wagepoint. We also allow the employee to split their pay between multiple accounts via percentages - checking, savings, bitcoin. Just as an interesting point of fact, 80% of the employees using the bitcoin feature in our app take a 100% of their net pay in bitcoin. So it's definitely gaining popularity.
The biggest benefit in the way we do it is that we take out all the Fed/ Sate and Local taxes first and then only allow people to take home a % of their net pay in bitcoin. This way we get to avoid questions from Uncle Sam :)
Always happy to see the bitcoin payroll community expanding - props!
The biggest benefit in the way we do it is that we take out all the Fed/ Sate and Local taxes first and then only allow people to take home a % of their net pay in bitcoin. This way we get to avoid questions from Uncle Sam :)
Always happy to see the bitcoin payroll community expanding - props!
Hey guys! We saw that the other day when we checked out your platform. I was referring more to how the settings are updated. It just felt like it was all up to the employer. Where everything is controlled by employee only on Incoin. Personal preference I guess.
Also great little tidbit of information!
We don't have taxes quite yet, but we do the same with only handling Bitcoin/ACH deposits post tax.
Thanks for dropping in and the support.
Also great little tidbit of information!
We don't have taxes quite yet, but we do the same with only handling Bitcoin/ACH deposits post tax.
Thanks for dropping in and the support.
How is this different than Bitwage.co?
We've chatted with the Bitwage guys. Good guys. We respect what they're doing.
Well there are a few differences currently, and even more coming over the next month - 2 months. But the ones that are currently available:
1. Interface. If you use the two product side by side, I think you'll see the difference.
2. Automation. Currently Bitwage (as I understand it. I could be wrong) handles ACH and Bitcoin transactions manually. Our platform is a little further along. Although they did get their MVP out before ours because of this so props to them!
3. Employee control. Our platform relies on employees to control the majority of their information which provides several benefits but mostly ease of use for the employer and freedom for the employee to update their settings and how they're paid right up to the moment that the distribution daemon fires up.
4. Wage splitting. Employees can get their paycheck into several checking accounts, savings accounts, investment accounts, and Bitcoin wallets.
5. Reporting. Our reporting for both an employer and employee is a bit more robust in our minds and takes into account that people getting paid in BTC will now have capital gains considerations.
Well there are a few differences currently, and even more coming over the next month - 2 months. But the ones that are currently available:
1. Interface. If you use the two product side by side, I think you'll see the difference.
2. Automation. Currently Bitwage (as I understand it. I could be wrong) handles ACH and Bitcoin transactions manually. Our platform is a little further along. Although they did get their MVP out before ours because of this so props to them!
3. Employee control. Our platform relies on employees to control the majority of their information which provides several benefits but mostly ease of use for the employer and freedom for the employee to update their settings and how they're paid right up to the moment that the distribution daemon fires up.
4. Wage splitting. Employees can get their paycheck into several checking accounts, savings accounts, investment accounts, and Bitcoin wallets.
5. Reporting. Our reporting for both an employer and employee is a bit more robust in our minds and takes into account that people getting paid in BTC will now have capital gains considerations.
I think Bitwage might already allow employers to pay for the payroll order in Bitcoin.
This product might be cheaper than what we do now, but the landing page does not convince me it's better.
(Disclaimer: HR & payroll is not my department.)