The Payroll eNewsletter from Atlantic Capital Bank              1st Quarter, 2014
Meet the Team

Tracy Fuller
Senior Vice President of Deposit Operations 
Tracy manages Atlantic Capital Bank's operations teams and has more than 15 years of experience in client services and payment processing. She has played an essential role for corporate clients during implementation, testing and ongoing support of their payments needs at Atlantic Capital Bank.
Tracy and her teams are dedicated to providing excellent customer service while processing payments accurately and efficiently.

Contact Us
Nathan Ottinger
SVP, Payment Services Banking
Atlantic Capital Bank
3280 Peachtree Road NE
Suite 1600
Atlanta, GA 30305
U.S. Historical Interest Rate and Economic Data
Financial Instruments
(as of 3.26.14)
1-year ago
1-month Libor
6-month Libor
1-year T-bill0.15%0.15%
5-year T-bill1.75%0.79%
10-year T-bill2.78%1.92%
U.S. Unemployment6.7%7.7%
*Current and historical rate data taken from the Federal Reserve Board (

Payments Industry Calendar of Events


NACHA Payments - Annual Conference
April 6 - April 9; Orlando, FL


Electronic Transaction Association - Transact Conference
April 8 - April 10; Las Vegas, NV  


The Payroll Group - Annual Conference
May 7 - May 9; Jacksonville, FL     


SHRM - Annual Conference
June 22 - June 25; Orlando, FL


IPPA Annual Conference
August 6-August 8; Huntington Beach, CA


Money 2020
November 2 - November 6; Las Vegas, NV  


IPPA Tax & Operations Conference
November 4 - November 5; Nashville, TN 

It's Payday - Show Me the Bitcoin!

Nathan Ottinger,

Senior Vice President, Payments Banking

One of my jobs as a teenager was working at a surf shop on the east coast of Florida. My intent for this job was to earn enough money to buy a new surfboard from the shop where I was working. I was paid $3.75 / hour for a summer's worth of work but might as well have just accepted deferred compensation in the form of a shiny new surfboard.

The nature of compensation is an interesting psychological science and one that is becoming more interesting with the introduction of Bitcoin as a potential payment mechanism. Much has been written about the use of Bitcoin (BTC) as a new global "virtual" currency. Proponents will argue that Bitcoin has the potential to replace traditional government-issued fiat currencies because of its ability to be easily exchanged amongst market participants. Detractors will argue that Bitcoin is unstable, ripe with potential fraud, and contradicts the very definition of a method to store and exchange value. No matter your viewpoint on the merits of Bitcoin, it's important to think about the possibilities and challenges that payday using Bitcoin might present for the payroll industry.


First, a little background on Bitcoin. Bitcoin is a peer-to-peer payments system and digital currency that was first introduced in 2009. It is known as a cryptocurrency because it uses software algorithms to control the creation and transfer of the currency between users. Bitcoin differs from other fiat currencies in that it is not issued or controlled by any central government authority.  Bitcoin is stored online in virtual wallets which provide the means to exchange Bitcoin from one user to another. The nature of this currency allows a sender of Bitcoin to remain anonymous. Until recently, Bitcoin was primarily used online and in limited high-tech-related circles.  However, over the last 12-18 months, more traditional merchants have begun to accept Bitcoin as a payment method mainly because the use of Bitcoin allows merchants to avoid the 2-4% credit card interchange fees. In addition, the settlement of Bitcoin is final once received, so the risk of chargebacks and fraud are reduced.


So, if the use and acceptance of Bitcoin is on the rise, how does one get Bitcoin? I recently read that some employees of several high-tech firms were asking for and getting paid in Bitcoin rather than in US dollars. There is a Bitcoin-related company that has the capability to work with payroll service bureaus and provide software functionality to manage and distribute payroll funds in Bitcoin to employees as a post withholding tax distribution.


As a long time banker, trying to get my head around the use, distribution and security of a virtual currency has been admittedly difficult; however, I believe the virtual currency trend has some interesting possibilities and challenges for the payroll industry to consider.


Potential Possibilities:

  1. Ability to offer "payroll in Bitcoin" as a value added service to clients / employees that want all or a portion of their payroll in Bitcoin (BTC).
  2. Facilitation of global payroll management utilizing Bitcoin as the base currency.
  3. New and cost-effective method of payroll distribution to "non-banked" employees.

Potential Challenges:

  1. Wild fluctuations in US Dollar / Bitcoin exchange rates can occur. Over the last 6 months the Bitcoin to USD exchange rate has fluctuated from a low of $200 to a high of $1,200 and currently is approximately $575 (USD / BTC). These drastic fluctuations in exchange rates, sometimes changing as much as 50% in a day, can create significant challenges between a payroll service bureau and its clients. What happens between the time you impound funds from your client in USD and distribute funds in BTC and the currency fluctuates significantly? Who takes the exchange loss or gain during this time? What if intra-payroll adjustments need to be made? Currently you cannot hedge BTC currency exposure in any meaningful way.
  2. Bitcoin exchange security questions abound. Recently, one of the largest Bitcoin exchanges called Mt. Gox filed bankruptcy and disappeared with approximately $500MM in Bitcoin value. In the Bitcoin world, this is equivalent to London's Stock Market (FTSE) going out of business overnight and not settling outstanding trades. What if a payroll service bureau was using this exchange to convert funds from USD to BTC and the impounded payroll funds simply disappear?
  3. An uncertain regulatory environment exists. The US government and other global regulatory authorities have yet to fully define the regulatory framework of how BTC might be regulated from a tax and compliance standpoint. Potential regulatory decisions could eliminate some of the underlying reasons why BTC was created and deemed beneficial as a payments mechanism.  Would a payroll service bureau or their respective client fall under anti-money laundering (AML) compliance rules if it were to distribute Bitcoin to employees?

At this point in time uncertainty in the Bitcoin payment system would create uncertainty between a payroll service bureau and its client relationship. The payroll industry is one where repeatable processes and adherence to a strict regulatory environment are paramount and introducing an uncertain payment mechanism is a steep hill to climb. When chatting about the merits of Bitcoin with an executive of one of our payroll service bureau clients, he stated, "I wouldn't touch Bitcoin within the payroll process with a 10 foot pole."


Will market demands and client desires bring a new payment vehicle to the doorstep of the payroll industry? Bitcoin has the potential to be a disruptive force on the global payments system, will it be imbedded into our respective payroll cycles in the near term? It's interesting to look back over the last 150 years and see what other types of "currencies" and payment methods were utilized to pay employees:


Gold & silver coins, government issued paper notes, bank issues paper notes, stamps, redeemable bonds, cotton, ledger credit at company stores, checks, tobacco, ACH, payroll cards and private company stock options.


Might we be embarking upon our next change in the way employees receive payment for their labor? As soon as I find that old surfboard in my garage, I will let you know.


We would welcome your comments and feedback.

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