Bitcoin is an online currency that has gained international acceptance and recently the support of Silicon Valley Bank through a partnership with CoinLab and its deal with Mt. Gox, the owner of the world’s dominant Bitcoin exchange. CoinLab will be Mt. Gox’s exclusive partner in the United States and Canada.
Expensify explains Bitcoin in additional detail on its website:
Bitcoin is a decentralized digital currency that enables instant payments to anyone, anywhere in the world. It uses peer-to-peer technology to operate without a central authority. It depends on the same cryptography that secures websites to ensure the validity of the currency and payments.
According to Expensify, “before sending or receiving Bitcoins, Expensify customers will need to establish a Bitcoin wallet. The wallet, either stored locally on the contractor’s computer or on a website, will have an address assigned to it that you will use to send or receive Bitcoins.”
CEO David Barrett said in an interview that customers can use exchanges to transfer Bitcoins. These exchanges, like Mt. Gox, serve as ways to convert Bitcoins into hard currencies. Bitcoin is traded, so the value may vary relative to the currency where the contractor does business. The Expensify site states that reimbursements with Bitcoin are made directly from the payer to the submitter. Expensify is not a party to the transaction, and a Bitcoin reimbursement cannot be canceled or reversed once initiated.
Expensify will offer an option for contractors to request Bitcoin reimbursement:
Contractors enter their Bitcoin address or can opt to have it pre-filled:
To reimburse with Bitcoin, a payer needs Bitcoins in their wallet. When ready to reimburse, they will see Bitcoin as an additional option for payment:
Here’s what the payer sees when the reimbursement is made:
Barrett said in an email that, as contracts get larger, PayPal fees get expensive for international contractors. Fees to exchange Bitcoin are minimal comparably. As Expensify points out in its blog:
Previously, our US companies with international employees or contractors were incurring currency conversion or wire transfer fees to the tune of 4% in some cases. To this end, Bitcoin is a great tool for minimizing the cost of reimbursing companies outside of the US. As a plus, transfers are secure and instant – no more waiting multiple business days for your ACH to clear!
Expensify is the first enterprise company that is embracing Bitcoin to such an extent. It’s acceptance is a sign of what is to come as Bitcoin goes mainstream. In the meantime, the process is still a bit cumbersome and will need some streamlining before it goes truly mainstream and gains greater acceptance with contractors. Or maybe not — those lower fees may be all contractors need to get a Bitcoin wallet and start receiving reimbursements.