In payroll processing, there has always been a long interlude before employees receive their paychecks. This becomes even more difficult and unfortunate when employees are housed overseas. On top of all of this, extra fees and surcharges, as well as common system errors, exist for both the employer and employee.
However, blockchain has the ability to provide an alternative method of liquidation for employees. With the decentralized, peer-to-peer (P2P) system of blockchain, large-scale employers can directly transfer checks to employees without the need for third parties. Holistically, using blockchain will provide cost-efficient, secure, and effective financial interactions while counteracting the complications in payroll today.
When the employer sends a check to an employee domestically, the transfer is typically processed through a bank. Yet, if an employee happens to be relocated internationally, this financial transaction becomes incredibly complicated. The employer must access a bank that has contacts internationally, which adds processing time and third-party fees. Such financial institutions charge extra fees due to the currency exchanges, and intermediaries will place another charge in turn for their services. In addition, banks also charge their clients fees for cashing in a check received overseas.
Blockchain Improves Payroll
Through blockchain’s direct P2P system, money moves faster worldwide. Blockchain enables transfers to be directly received anywhere anytime with the system's decentralized feature.
For example, Bitwage provides a blockchain-based platform as an effective and hassle-free option for sending and receiving payrolls domestically and overseas.
Based on the Ethereum, Etch also enables effortless payments with blockchain. Employees use tokens to get paid and payroll systems are backed up by smart contracts. Etch even created a payroll card in which consumers can use to purchase anything in numerous stores.
With blockchain's guaranteed security, data cannot be manipulated. So blockchain and banking are also something to talk about. The entire banking system will become insignificant as people worldwide operate on a blockchain to automatically and directly acquire their wages. Payroll supported by fintech blockchain will increase the transparency of payroll history and information while preventing any potential errors with financial transactions.
The payroll process doesn’t need to be complicated with extra fees, pesky intermediaries, and unnecessary processes. Blockchain prevents all of this while offering more flexibility, transparency, and convenience for both the employer and employee locally and internationally.
If you're a startup that is improving the way payments and payroll are made, join our Fintech accelerator which accepts applications all year round.