

Show HN: Incoin.io – Bitcoin and Distributed Payroll - codelitt
https://www.incoin.io/

======
eli
It seems like this is solving the easy part of payroll. The actual "moving
dollars between accounts" bit I just assume works fine with all payroll
providers. It's getting taxes and deductions and bonuses and multiple states
correct, and getting good reporting.

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.)

~~~
tonyhb
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.

~~~
CJefferson
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?

~~~
tonyhb
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.

------
AJ007
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.

~~~
atmosx
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.

~~~
codelitt
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.

~~~
atmosx
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).

~~~
codelitt
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.

------
primitivesuave
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.

~~~
codelitt
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.

~~~
tyre
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...](http://help.zenpayroll.com/customer/portal/articles/972807-employee-
direct-deposit) [2] [https://zenpayroll.com/blog/zenpayroll-
giving/](https://zenpayroll.com/blog/zenpayroll-giving/) [3]
[https://zenpayroll.com/api/v1/states](https://zenpayroll.com/api/v1/states)

~~~
codelitt
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...](http://blog.incoin.io/introducing-incoin-bitcoin-distributed-
payroll/)

------
wdewind
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?).

~~~
codelitt
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.

~~~
wdewind
> 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.

~~~
tonyhb
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.

~~~
wdewind
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.

~~~
codelitt
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.

~~~
wdewind
Sounds good look forward to it. Btw I think I found a typo on your site:

[http://www.codelitt.com/technologies](http://www.codelitt.com/technologies) A
successful product requires lorem ipsum dolor sit amet in tenebris.

~~~
codelitt
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.

------
vessenes
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.

~~~
genwin
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.

~~~
dissentertainer
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...](https://medium.com/the-block-chain/creating-the-everything-
ledger-a0471c3424e) 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.

~~~
codelitt
Amazing answer and awesome link. That would be a massive boon. What startup do
you work for?

~~~
dissentertainer
The company is called ArtsPool ([http://artspool.co](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.

~~~
codelitt
I get what you mean.

Impressive. What kind of tools do you guys have in the works? How is the
compliance toolkit working out?

~~~
dissentertainer
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.

~~~
codelitt
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.

------
agilebyte
So is this like [http://wagepoint.com/](http://wagepoint.com/) that does
bitcoin too?

~~~
codelitt
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.

~~~
payrollpeeps
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!

~~~
codelitt
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.

------
forlot
How is this different than Bitwage.co?

~~~
codelitt
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.

~~~
rebret
I think Bitwage might already allow employers to pay for the payroll order in
Bitcoin.

