Traditionally, when a money service business (MSB) wants to send money from one country to another, it has to prefund the same amount in the receiving country, bringing about tied capital, high opportunity cost, and operational inefficiencies. What's more, since cross-border transactions are often considered risky, access to credit has always been a major problem for MSBs.
Designed to empower licensed MSBs all over the world, the soon-to-be-launched Arf Credit emerged as an idea when Arf co-founders noticed that most MSBs had issues with high prefunding requirements and limited access to working capital.
Co-Founder Kazım Rıfat Özyılmaz says that MSBs have been underserved players of the finance industry, especially in accessing working capital. “Of course, the industry must manage risks—but it also has to find innovative ways to enable the growth of cross-border transactions,” he underlines.
“The real problem with the current cross-border payments industry is that when you’re successful as an MSB, you need more money to run it,” says Co-Founder and CEO Ali Erhat Nalbant. “We developed Arf Credit as an API-based, transactional short-term working capital in USDC so that MSBs can use stablecoins without prefunding.”
Although options existed, most lending companies only served customers with long-term credit needs or single payout corridors. Application processes were lengthy, and once the credit was given, it had to be repaid regardless of whether it was used.
Co-Founder Berhan Kongel says that licensed MSBs can instantly get the credit with a 2-7 day repayment period through Arf Credit. “Each eligible MSB is assigned a certain amount of credit based on its transactional volumes within the Arf Network. They only pay interest for the credit amount used, and can automate repayments,” he explains.
“We are really excited to be a key player in enabling the cross-border payments industry to compliantly benefit from the blockchain and digital assets,” Ali Erhat Nalbant says. “It was a much needed improvement in global payments.”
Arf Credit enables MSBs to scale in existing payment corridors and expand to new ones by creating a source of capital. This way, they can survive and stand against monopolization in the cross-border payments industry.
By providing an API-based cross-border payment infrastructure that brings cross-border treasury, financial operations, liquidity, KYC, and FX management together with a zero collateral credit line for MSBs, Arf completely changes the game in global payments.
Arf is a global settlement banking platform, eliminating the capital-intensive business model of the cross-border payments industry by offering digital asset-based working capital and settlement services with native on-ramp and off-ramp capabilities to licensed money service businesses and financial institutions.