The Business Exchange was founded in 1995 by Richard Logie and Linda Sim in Aberdeen, Scotland. It functions as a trade exchange network where members can extend mutaul credit when they trade with eachother.
The principle purpose of the exchange is to support the local economy by providing a platform for local business to engage in cashless barter exchanges. This purpose is carried out by offer 3 principle benefits to business members
- Generate additional sales to new customers.
- Acquires valuable products and services – items which would normally require payment in cash.
- Preserve cash, improve cash-flow and increase profits
The Business Exchange was established primarily in the region around the town of Aberdeen but has now been expanded in allow business members from all over scotland
Organisation and History
At present the company is stuctured as a Limited Liability Company but there are plans to move towards a mutual society structure. It is a member of IRTA which means that its members can trade accross the hundreds of trade exchange networks.
a) The system in numbers
The internal currency of the Trade Exchange is the ‘trade credit’. There were, as of 2012, over 200 businesses who were members of the Business Exchange. At present there are no published turnover figures detailing the volume of trade going through the exchange.
The currency is purely electronic with no paper notes in circulation.
b) Function and Unit of Account
The principle function that the currency is as a medium of exchange with the unit of account being pound sterling £.
c) Issuance – Backing
The currency is issued everytime a member engages in a trade with another member by lacks the positive balance necesary to complete the transaction. The seller member will simply extend the credit to the buying member. The software will them record the new positive and negative balances of the members.
The currency is backed by the promise of its members to engage in provide goods and services in exchange for ‘trade credits’ or unversal currency
d) Software (optional)
The excahnge is supported by the web based GETS software
f) Specific Attributes (optional)
The business exchange also offers a brokering service to help match businesses needs with what is available within the network.
g) Funding – Business Model
The revenue is generated by charging membership, due in legal tender, and transaction fees. The structure for both types of fees are not publicly available.
How does it work in practice?
When a new business wants to joni the business exchange it has to fill out a credit line agreement, put up some form of secutiry to join the network and ,importantly, establish a history of selling goods and services before being allocated a credit line. Once a business has the credit line in place they are able to trade with any member for any good or service provided they saty within their agreed limits.