Knowledgebase: Exchange Best Practices
vBarter - How do members start trading in a new exchange if no one has trade dollars?
Posted by Bruce Kamm on May 24 2010 08:26 AM
Q: How do members start trading in a new exchange if no one has trade dollars?
A: To get trade velocity started in a new exchange, you provide members with credit lines, much like a bank issues credit cards to businesses with credit lines.
Members can spend the credit lines, but they have to pay back the credit line with sales. And, you typically charge trade interest on negative trade balances.
The credit lines issued are not backed with cash, but you should get a credit card or bank account info on each member to charge their fees to their credit card or by EFT/ACH to their checking account. In your trading rules, it's a good practice to indicate that if they don’t pay back the credit line with sales on barter, then the amount of their negative balance (credit line used) will be due and payable in cash.