A deal struck between payments colossus NCR and NYDIG, will soon allow community banks and credit unions to enable cryptocurrency trading via mobile apps. The move will lead to direct competition between these institutions and cryptocurrency exchanges.
A recent Forbes article stated that National Cash Register (NCR) currently provides digital banking service to ATMs and point-of-sale establishments such as the restaurant business in 160 countries worldwide. It is the largest global provider of point-of-sale software, primarily to grocery and other retail stores, serving 180,000 restaurants and dominating the sector with a 45% market share.
In May, NCR partnered with Flexa to allow Sheetz customers to pay for goods with cryptocurrencies such as bitcoin, ether, litecoin, doge and others. Since then, according to NCR, “dozens” of clients have reported to them that clients were using their savings to buy cryptocurrencies.
NCR decided not to try and dissuade their banking clients from buying bitcoin and other cryptocurrencies. Instead, realising the value that could be captured, NCR thought to provide these services themselves.
According to Stone Ridge co-founder Yan Zhao (Stone Ridge is a sister company of NYDIG):
“A lot of these banks have seen that one of the biggest outflows from their depositors is moving money from the bank to exchanges like Coinbase, and so that’s part of why banks are so excited to have this capability for themselves and for their consumers.”
There are 2 phases to the NCR/NYDIG partnership. Phase 1 will allow NCR’s banking clients to trade, buy and sell cryptocurrencies through the provided mobile app. NYDIG’s head of bank solutions, Patrick Sells gave an upbeat statement on this, saying:
“I think you’ll see cheaper transaction fees through the banks than what you have today in the marketplace, but the banks do get to determine what they want that transaction fee to be.”
The outcome for phase 2 will eventually be that NCR will have custody of its own assets. It is also exploring use cases with blockchain that don’t include cryptocurrencies. Also, NCR is working on a second wave of nearly 200,000 restaurants and other retail clients to enable them to offer payments in cryptocurrency.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
