By using the facility to pay merchant settlements, NetCents believes it can eliminate the volatility risk that makes holding crypto positions more difficult
NetCents Technology Inc (CSE:NC) (OTCQB:NTTCF), a cryptocurrency payments company, announced Friday that it received an industry-leading US$1.4 billion credit facility to fund merchant settlements, thus making it easier to hold crypto positions.
The company negotiated the deal — which it said is the largest credit line ever granted to a cryptocurrency payments company — in order to increase the potential of cryptocurrency as a means of exchange.
By using the facility to pay merchant settlements (read: the means by which merchants are paid by consumers) NetCents believes it can eliminate the volatility risk that makes holding crypto positions more difficult.
READ: NetCents Technology integrates cryptocurrency platform into Automatic Clearing House for US-based merchant payments
The credit is also meant to help cryptocurrency exchanges themselves by creating a deeper market for the more mainstream cryptos. The company has partnered with a handful of institutions to use its merchant order flow as a supply for a short-term crypto portfolio.
Such a credit line will enable NetCents to have money in the market over an extended period, and profit from arbitrage opportunities, which could ultimately allow the company to reduce fees to its client base.
“This is a huge win-win-win,” CEO Clayton Moore said in a statement. “Merchants benefit because this facility and trading program will reduce our operating costs, which will enable us to charge smaller fees to our merchants in the future. NetCents will benefit as it has a new revenue stream to support operations — these trading strategies we can deploy are highly profitable.
“The exchanges benefit as well due to the increased capital deployed in the market, which means that over time, volatility will decline, creating an environment allowing mainstream participants to adopt crypto as a means of exchange and not purely speculation.”
The credit facility provides NetCents with the ability to front-load merchant settlements and remove all limitations when providing merchant payouts. This should ease merchant and partner concerns over the company’s ability to handle significant order flow, NetCents said.
Ultimately, NetCents believes the financing will curb any obstacles to unlimited processing and all risk associated with merchant payouts.
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