Barter Card
Roopen Roy
Sri Ramakrishna –the guru and mentor of Swami Vivekananda advised his disciples to be detached from money. “Taka Mati, Mati Taka” he said. “Consider cash as a handful of dust and dust as a handful of money.” Rather than devoting oneself to the pursuit of wealth, many followed his call of serving humanity. Some interpreted his advice like the Delphic Oracle. They focused only on the second part of his sermon .They made pots of money by investing in “land”-another translation of the word “mati”. Omar Khaiyam focused on cash flows. “Ah, take the Cash, and let the Credit go, nor heed the rumble of a distant drum!” was his advice.
Money is important. Except for the tiny Himalayan Kingdom of Bhutan which imaginatively measures Gross Domestic Happiness, all countries in the world measure progress by tracking the growth of the Gross Domestic Product (GDP). GDP is invariably expressed in units of money. If you are unable to express the worth of an asset in monetary terms, you confuse the financial world. No wonder knowledge companies curse bankers for their inability to assess intangible assets. It was perhaps his frustration with English bankers that led the Irish Oscar Wilde to proclaim “they know the price of everything and the value of nothing.”
Most money does not exist in physical form any more. The trillions of dollars that criss-cross the globe with great speed do so in a digital form across networks. We have succeeded in converting paper into virtual, electronic impulses.
Before the digital age, barter was physical. I gave you rice and in exchange you provided me with cooking oil. You fixed my car and I helped you file your tax returns. Digital innovation is providing new ways of enabling exchanges and redefining the role of money. If you are in Africa you may choose to pay with phone minutes. The innovation is in the payment model that uses existing technological infrastructure. Africa has more than 100 million mobile phones. By 2012, it will have almost 400 million phones. But people in Africa have limited access to a reliable and stable banking system in parts of the vast continent.
Enter innovation. The mobile phones are doubling up as electronic wallets. The vast majority of mobile users in Africa do not have post-paid connections. They buy “phone minutes” from shops. The mobile network of Kenya has an innovative payment mechanism called M-Pesa. M stands for Mobile and Pesa in Swahili means money. People can send to each other via text,value in the form of phone minutes. During the political instability in Kenya in 2008 phone shops were closed, phone cards became scarce and phone minutes became a quasi-currency. Family members sent phone minutes across networks at great distances which people used to buy food and other necessities. Suddenly a mobile telephony company has the opportunity of replacing a mint or a bank in creating a new type of currency or enabling a new form of barter.
There is another kind of innovation from Down Under. You have heard of Diners, Visa and Master cards. Have you heard of a Bartercard?
If you have not please check it out @ http://au.bartercard.com/. Bartercard is the world's largest barter trading exchange. Bartercard enables member businesses to exchange goods and services with other member businesses without using cash or cash equivalents. It operates in 9 countries with a member database of over 75000. Members earn Bartercard Trade Dollars for the goods and services they sell and this value is recorded electronically in the member’s account database.
According to International Reciprocal Trade Association more than 400,000 businesses transacted $10 billion globally in 2008 and the volume of business is growing. Barter exchanges are taking a leaf out of the time-share condominium business. They are marketing barter cards as a tool of enhancing capacity utilization and volumes. Hotels, for instance, which are suffering from low occupancy are “banking” rooms to create credits which can later be used to buy flowers, paint and chicken. The bartercards of the world are making the exchange methods more sophisticated and with the touch and feel of bank credit cards. They issue monthly statements and an interest-free line of credit –with solid security and safety. A hotel in need of Rs 50,000 worth of paints may offer meals worth Rs 50,000. It is unlikely that the paint supplier will use Rs 50,000 to buy biriyanis or tandoori chickens. But he does not have to. In the exchange transaction, the hotel owes Rs 50,000 to the network, not to the paint supplier. The paint supplier is free to buy other stuff he needs by using his “credit”. The exchange becomes a sophisticated, multilateral barter clearing house.
The banking system is unlikely to be replaced by these innovations in payment systems. They will merely supplement it. Therefore, Voltaire’s advice may still be valid , “If you see a Swiss banker jump out of a window, follow him. There is surely money to be made,"