October 14, 2020

Nash Link: Why merchants will embrace simple crypto solutions

Nash Link

Nash is proud to announce the launch of Nash Link, a solution for merchants designed to make it as easy as possible to accept cryptocurrency from customers.

Ecommerce is expected to surpass USD 4.6 trillion globally by 2022, with the seamless experience of e-wallets boosting their popularity. The simplicity of services like PayPal and Stripe has helped to improve customer experience while giving merchants easy access to new markets.

Blockchain-based solutions represent the next logical evolution of this trend. By eliminating middlemen, cross-border blockchain payments can result in even faster transfers while significantly reducing costs for both merchants and customers.

Nonetheless, blockchain has proven difficult for merchants and payment providers to integrate.

In 2018, Stripe discontinued support for Bitcoin, citing lengthy confirmation times, volatility and high fees. Similarly, merchants are discouraged by the technical hurdle of integrating with blockchains, as well as fees and market risk.

Just two years later, Nash Link solves these problems:

  • Nash spares merchants any blockchain integration. We receive digital assets from customers and convert these to USDC on our exchange, settling with merchants directly in national currency.
  • Nash protects merchants from surprise fees and volatility by guaranteeing the fiat amount they will receive for goods/services, managing associated risk ourselves.

In the past, payment processing has been a cost center for merchants. By making the power of blockchain easily available, Nash Link helps create a new revenue center – with no fees, no risk and no chargebacks!

The cost of trust in traditional payments

In a traditional payment flow, three to five parties facilitate a single transaction. Together, they make up what is called the “payments stack”.

These different parties work together to create trust. They check that transactions can be carried out and manage the transfer of funds.

At the same time, this trust has a cost, which is ultimately borne by merchants. Each party within the payments stack takes a small cut of a transaction.

The traditional stack for credit card payments looks like this:

A typical transaction involves a payment processor checking with the issuing bank if a customer’s card can be charged. Once a transaction is validated, which occurs within a few milliseconds, a merchant has a guarantee that they will be paid at a later date. Over subsequent days, funds are transferred from the issuing bank to the acquiring bank.

The traditional stack involves numerous charges. Card networks and other parties can also raise their fees. As recently as September 2019, Visa added a fixed charge of 0.02 EUR for merchants using 3D-Secure, which is increasingly required under new PSD2 legislation.

Cash flow, holdbacks and fraud

Cost isn’t the only issue merchants face with the traditional stack. The speed of transactions can also be a problem. While validation takes place in milliseconds, it can be days before money finally arrives in a merchant’s bank. This is not ideal for small-to-medium-sized businesses that depend heavily on cash flow to pay suppliers and employees.

When we look beyond card payments, the picture is even worse for merchants. In the US, the average B2B payment cycle takes 34 days to complete, with 47% of invoices being paid late!

So-called “holdbacks” are another issue that has come to prominence recently. Here, acquirers keep a percentage of a merchant’s revenue as collateral in case a service is not provided and refunds must be issued. Holdbacks have particularly affected the travel industry as a result of the COVID-19 pandemic. Most travel is booked long in advance, and given the uncertainty introduced by COVID-19, holdbacks have increased significantly. This has led to reduced cash flow for merchants – and ultimately to the insolvency of Thomas Cook and Flybe.

While traditional payments are geared towards creating trust, 78% of businesses reported attempted or actual B2B payments fraud during 2018, with international fraud rising 136% from 2017–2019. Although nearly half of payment fraud is related to pen-and-paper processes, digital methods and credit cards are not immune.

Faced with this situation, it is not surprising that more and more companies are turning to fintech to reduce payment costs, particularly when it comes to B2B payments, where 1.8% intercharge fees for cards introduce excessive overhead.

The promise of blockchain

When we view the payments stack as a means of generating trust, the promise of blockchain becomes clear: eliminating the stack entirely. Customers send funds directly to merchants, with transactions being verified by a decentralized network.

Blockchain promises great improvements for merchants in terms of speed and cost. No middlemen are required to check whether funds can or cannot be sent – the network will reject a transaction if a wallet has an insufficient balance. Once a transaction is confirmed, funds arrive within minutes. The only cost is a network fee, paid by the customer themselves.

What’s more, blockchain is ideal for protecting against fraud and encouraging transparency. The fundamental problem blockchain solves – the “double spending” problem – is directly related to preventing fraudulent transactions. Blockchain is designed to make it impossible to spend coins you do not have. Moreover, since blockchains are public ledgers, regulators can easily perform automated audits.

Blockchain is also a universal solution. While the US has ACH for bank transfers and the EU has SEPA, Bitcoin works the same everywhere. No bureaucracy is required to send funds overseas. Not only does this make designing integration protocols relatively simple, but it gives merchants easy access to new overseas markets.

A 2019 report from the European Payments Council indicated an increase of cryptocurrency use alongside the growth of e-commerce.

Are we there yet?

While cryptocurrency payments are on the rise, a number of factors still hold merchants back from adoption.

Firstly, there is the technical challenge of operating a blockchain wallet. Merchants need to know how to set up a wallet. They also have to integrate its address into their store. Moreover, managing a wallet comes with additional security requirements, since self-custody makes you responsible for your private key.

A second major factor is the risk involved when holding cryptocurrency and converting it back into fiat. Crypto assets are notoriously volatile, so unless conversions are carried out immediately, merchants face unwanted exposure to cryptocurrency markets. What’s more, conversions back to national currency often come at a price.

One final concern is regulation. Even if a merchant is confident managing wallets and converting funds back to fiat, they need to present clear accounts for tax reporting. Crypto may help protect merchants from fraud, but the headache of proving their own legitimacy to regulators may be too much.

Nash Link is the first cryptocurrency solution to address all these problems – and it’s completely free for merchants to use.

Nash Link introduces an ultra-simplified alternative to the traditional payments stack that exempts merchants from all transaction costs:

No costs are incurred for merchants besides the time involved integrating the Nash Link widget into their store. Developers can get set up in minutes with easy-to-use e-commerce plugins and well-documented APIs.

When integration is complete, Nash Link can be managed through an online portal, without having to think about blockchain wallets at all.

The Nash Link merchant dashboard.‌‌

Nash’s payout system means merchants receive weekly revenue reliably – exactly the amount they expect, thanks to protected exchange rates. Generating documents for accounting purposes couldn’t be easier.

Blockchain has too many advantages over traditional payment solutions for merchants to ignore. Nash Link eliminates all barriers to entry and finally allows blockchain to fulfil its potential.

By accepting cryptocurrency with no overhead requirements, merchants can tap into a growing multi-billion-dollar market and get a taste of a cashless, borderless future.

If you’re a merchant and are interested in Nash Link, check out our business website and get in touch!

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Nash was the first Crypto Platform in Europe registered by the Financial Market Authority (FMA) of Liechtenstein. Nash is also registered with the De Nederlandsche Bank N.V. (DNB).
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Nash’s Crypto Platform and Investment App uses state-of-the art, audited security measures and is fully non-custodial.
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Rates may vary over time. Crypto-powered earnings on Nash are not covered by any deposit guarantee schemes like bank savings accounts and involve risks unique to the underlying technologies: (i) Exploitations of the smart contracts used; (ii) Forex fluctations between your national currency and the US dollar, which underlies crypto earnings assets; (iii) USD stablecoins losing their peg. 
Nash is a trademark of Neon Exchange Aktiengesellschaft. Neon Exchange Aktiengesellschaft is an exchange bureau registered with the FMA of Liechtenstein (TT Exchange Service Provider Nr. 261096 as defined by the Token- und VT-Dienstleister-Gesetz / TVTG, 3 October 2019)
Nash Exchange B.V. is registered with De Nederlandsche Bank N.V. (DNB) as a provider of crypto services. DNB conducts supervision and monitors Nash Exchange B.V.’s compliance with the Money Laundering and Terrorist Financing Prevention Act and the Sanctions Act 1977. Nash Exchange B.V. is not under the prudential supervision of DNB nor under business conduct supervision of the AFM. This means there is no supervision of financial requirements or business risks and no specific consumer financial protections.
Neon Exchange Aktiengesellschaft is a partner of Modulr Finance B.V., a company registered in the Netherlands with company number 81852401, which is authorised and regulated by the Dutch Central Bank (DNB) as an Electronic Money Institution (Firm Reference Number: R182870) for the issuance of electronic money and payment services. Your account and related payment services are provided by Modulr Finance B.V. Your funds will be held in one or more segregated accounts and safeguarded in line with the Financial Supervision Act – for more information please see this link.
Neon Exchange Aktiengesellschaft also provides fiat-crypto exchange services. These are separate and unrelated to the account and payment services you receive from Modulr Finance B.V.