Locks in Transaction Price and Enables Conversion to Fiat, Other Currencies
In the brave new world of cryptocurrency and digital transactions, a Vancouver-based company has removed the largest barrier for merchants to broadly accept cryptocurrency for everyday transactions. NetCents (CSE: NC) is the first-to-market to immediately lock-in the cryptocurrency price at the moment of sale, enabling instant conversion to fiat and other cryptocurrencies.
Understandably, merchants have been cautious to assume the risk of accepting digital currency amidst highly volatile currency swings. Imagine, as a vendor you accept $1,000 in Bitcoin only to find it tanking by 25% of its value in one week, as it did from mid-December last year from US$19, 000 to US$14,000 within a week. No one needs that kind of stress.
What NetCents accomplished has an enormous impact on the global digital currency market, currently valued at $330 billion. Even at that size, adoption is rapidly expanding, and still its infancy. According to Chainalysis, Bitcoin spent in the US alone reached $190 million per month by end of 2017, an increase of 2,000 percent from 2013. More than 19 million people in the US currently transact with digital currencies. Chainalysis estimates that 130 million Americans are willing to transact with crypto and four million US retailers plan on accepting crypto within three years.
NetCents offers a plug-and-play merchant gateway that allows vendors to accept Bitcoin, Ether, and Litecoin and settle instantly, locking in the price at the point of sale, eliminating any risk or discomfort that merchants face today. On April 12, the company announced the launch of Instant Settlements, providing merchants “guaranteed protection against market-volatility and liquidity issues associated with processing cryptocurrency transactions.” A few days prior, NetCents went live with merchants and is actively processing digital transactions using their Instant Settlement process, with thousands of new merchants in its pipeline.
So how is this small company from Vancouver, with a market capitalization of just over $100 million, leading the charge in the enormous global market with far-reaching social and economic implications while competing with global technology giants and the world’s banks?
Firstly, NetCents has been developing payment processing technologies for online transactions since its inception in 2006. Behind the scenes, the Company and its principals have played key roles in implementing some of the largest payment processing systems in the industry. To this day, NetCents continues to consult for larger firms in the traditional payment processing space.
“I’ve known Bitcoin and the technology behind it since its earliest days when it was priced at $11,“ says NetCents CEO and Founder, Clayton Moore. Prior to founding NetCents, Moore played a significant role in the adaption of many online payment process technologies into the gaming space.
“We saw an opportunity to be a first mover in the digital-payments arena and establish ourselves early. What we’ve created at NetCents is an entire ecosystem that allows merchants to safely and easily transact online with cryptocurrency. It’s more than just the technology. Now, it’s really about reputation and relationship, customer service and experience, which we have worked diligently to build.
“The mass adoption of cryptocurrency will be achieved through merchant adoption,” says Moore. “Vendors are not interested in speculating on a cryptocurrency, they simply want the assurance that when they sell something for $50, they get $50, and it stays at $50.”
In terms of overall transactions, Moore says the big credit cards such as Visa and Mastercard have made the rules for merchant-fulfillment difficult. For example, credit cards have a low tolerance for chargebacks and disputes. Many of these issues could be resolved by the consumer directly with the vendor. However, most people do this via the card provider, and if a merchant surpasses one percent of transactions in chargebacks and disputes – which is not difficult to do — the card vendor will shut down the merchant’s processing. “They’ve made it difficult for smaller and low volume, to medium-sized merchants, to accept these cards, so now there is a huge movement for alternative solutions and at the same time here we are being introduced to cryptocurrency on a global basis.”
Moore says at this early stage the big banks are watching the process and technology unfold, and will likely acquire the best technology and provider when they’re ready.
“By watching early adopters, the banks can validate the process before they implement the technology, similar to how a large technology or pharmaceutical company would, or how a significant player in any market grows and adapts to change.”
“Consumers and merchants alike are starting to understand cryptocurrency and now you have the world’s regulators starting to position themselves: what will we do? Will that lead to a digitized or tokenized US or Canadian dollar? Hard to say. Only time will tell.
“Meanwhile we’re just happy to remove those far-reaching concerns from the minds of merchants and allow them to safely and reliably transact in the here and now.”
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