Alternative Payments and Currencies for Contractors

 

Compliance First Approach

John F. Smith Managing Director CXC Global Americas

“The utilization of “alternative currencies” and “alternative payment” modes have been the topic at CXC Global’s Semi-Annual Global Directors Conferences since 2014.  As your company expands or enters into the utilization of global non-employee talent for projects or contingent work, take consideration of the laws and requirements of the country where your work will be performed.  A compliance first approach will all keep risk mitigation in line with company goals and expectations.” John F. Smith, Managing Director CXC Global Americas.

Before paying with bitcoin, here’s what the Federal Trade Commission wants you to know

While the value of bitcoin has been volatile over the past few weeks, its popularity has steadily increased. Financial gurus like Mark Cuban and Warren Buffett have weighed in, offering their takes on why one should or shouldn’t jump on the bitcoin bandwagon.

No matter how you feel about cryptocurrency generally, though, it’s useful to know that the Federal Trade Commission in a 2015 report recently resurfaced and promoted by the Better Business Bureau makes clear that spending bitcoin can be risky. Even a couple of years ago, the FTC says, it had already “received hundreds of complaints involving bitcoins and other virtual currencies.”

That’s partly because digital currency is created and stored electronically, the report notes, “which means it is not overseen or backed by a national government. Since there is no regulatory agency, the value of bitcoin can fall just as quickly as it can rise, depending on demand.

“Payments made with virtual currencies are not only irreversible,” the report continues, “they also do not have the same legal protections as most traditional payment methods, such as the ones you have when using a credit card.”

Some online merchants that accept bitcoin as payment, according the FTC, may not deliver the product on time or may only offer refunds in the form of store credit, not currency: “That is why it is important to always know the seller and their policies before making a purchase.”

Currently, 100,000 merchants worldwide accept bitcoin. That includes some big-name brands like Microsoft, Expedia and online-electronics retailer Newegg. It’s rumored that Amazon could soon begin accepting cryptocurrencies, too.

According to Bitcoin.com, there are more than 16 million bitcoin in circulation and 12,000 transactions made per hour.

If you’re making one of those transactions, or considering it, make sure to do your homework first. Check out the seller’s reputation and only chose to engage with companies you trust, suggests the FTC.

“Make sure you know where the seller is located and how to contact someone if there are problems,” because often “the only way to get a refund is through the seller or payment processor.”

Establish what exchange rate will be used for refunds before your purchase since the value of bitcoin can change rapidly. And read the seller’s privacy policy to find out what information might be collected and shared. “If the seller uses a payment processor,” the report says, “check its privacy policy, too.”

Bitcoin’s value was just above $15,000 Wednesday, according to the digital-currency website CoinDesk, which tracks prices from digital currency exchanges Bitfinex, Bitstamp, Coinbase and itBit.

If you have an issue with a bitcoin-relates service, you can file a complaint with the FTC, and, to report a possible scam, you can send a report via the BBB Scam Tracker.

The above article was originally posted on CNBC.com.  Click here to see it.

If you’d like to speak with one of our specialists about compliance for international contractors and contingent workforce, please contact us.

 

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