Opinion By Anthony DiMarsico, CEO at Banxe
Cryptocurrencies are continuously growing in prominence, and now, are particularly showing their value in cross-border transactions. For large global companies, cross-border transactions are necessary to pay teams or partners based in different countries. Currently, the cross-border transaction fee from country to country varies significantly depending on the credit card operator. For instance, American Express charges a cross-border fee of over 0.40%. So for large organisations, cross-border transaction fees can become very costly, but there are ways to avoid astronomical transaction charges.
Cryptocurrencies will have a significant role to play in the international payroll industry, providing companies with a way to pay employees around the world without being subject to huge costs. The use of crypto in the payroll industry will only become more commonplace, with companies turning to digital currencies as a way to avoid charges, pay staff quickly, and negate the need for conventional currency conversions. Crypto-transfers are currently the fastest currency transactions in the world. For example, Bitcoin transfers typically take 40 seconds to be sent to a recipient, compared to 2-3 working days with traditional bank transactions.
Payroll teams have recognised the benefits of crypto, but the question now is; how will this impact the wider global adoption of cryptocurrencies in payment solutions and overseas transactions?
Revolutionising the payments industry
The payments industry has remained relatively traditional in recent years, with employers sending employees online bill payments and payslips. But as cross-border transaction fees continue to rise, global companies are needing to find alternative methods to pay employees to avoid slow transaction times and mounting fees.
Using crypto is the key. Companies using cryptocurrencies to pay global teams are able to quickly pay employees, rather than waiting the standard 2-3 working days. This allows for quicker payment times, leaving payroll staff with less need to pre-pay staff ahead of the traditional end-of-the-month‘ payday’. This can help optimise payroll solutions and streamline payment systems since cryptocurrency payments can be received the very same day, sometimes instantly.
However, speed is not the only benefit of using crypto within payroll solutions. Cross-border transaction fees typically range from 0.4-1.2%, often leaving companies with substantial transaction fees which are easily avoidable. Companies using cryptocurrencies within payroll solutions can evade these higher fees, which can significantly lower payroll expenses.
This wider adoption will allow companies of all sizes to reap the benefits of crypto cross-border transactions. For micro enterprises and SME companies, large transaction fees can cause substantial internal expenses, which larger global companies may be able to cope with. So smaller businesses and SMEs can benefit greatly from using crypto within payroll systems saving them both time and money when paying multinational staff teams.
There are considerable benefits to using cryptocurrencies within corporate payroll solutions. However these must be executed properly to avoid errors in payment and currency exchanges.
The Global Adoption of Crypto
More companies, such as Microsoft, PayPal, Visa, and Mastercard, are beginning to accept cryptocurrencies as payment for products and services. As the race to accept cryptocurrencies accelerates, the wider adoption of crypto will begin to permeate all areas of payroll solutions.
This wider adoption will gradually begin to impact global business payment schemes. Currently, the top online payment methods for small businesses are via PayPal, Stripe, and Worldpay but using cryptocurrencies allows companies to bypass unnecessarily additional fees and utilise new digital currencies for employee payroll.
Cryptocurrency leaders have identified the wider adoption of cryptocurrencies for consumers and individual users, but now it is clear that crypto is beginning to enter the business payment industry, indicating the gradual global shift to accepting cryptocurrencies in many more payment forms.
The Future is Crypto
Companies are constantly seeking new ways to save both time and money, and crypto is the answer to their payroll solution issues. Using digital currencies allows smaller businesses to save costs for paying multinational staff and exploit new payment innovations, such as hourly payments in real-time.
Crypto is the future of payroll solutions in more ways than one. While there are considerable benefits to payroll solutions, many new companies have found that using crypto in payroll makes a company more attractive to younger talent. More younger people are beginning to enter the workforce and companies have found crypto incentives are making their workplace more attractive to new staff.
So, it is evident that crypto is not just the future of payroll systems but a tool to entice future employees to the office. The opportunities are limitless.