Composite FAQs

Q: What is a Trade Exchange?
A: A Trade Exchange is an association of Businesses who have joined together for the purpose of trading their products and services. A Trade Exchange offers an integrated Industry-to-Industry marketplace to the Business community for carrying out end to end transactions.

Q: How does a Trade Exchange work?
A: The Trade Exchange transaction model is based on the old barter concept whereby businesses trade without using cash. However, unlike traditional barter, Trade Exchange transactions do not require double coincidence of wants. To avoid double coincidence of wants, the Trade Exchange acts as a third party record keeper and clearinghouse. All accounting is done using a unit of measure called .

Q: What is ?
A: is used as a unit of measurement and accounting of the value of goods and services that are bought and sold by members of the Exchange.

Consider the following example:
A Member X sells goods to another Member Y. In return, Member X gets Trade Credit from Y. The amount of exchanged is equivalent in value to the value of the goods that he has sold. Member X can use accumulated in this way, to buy products and services from any other member of the Exchange. This eliminates the need for the occurrence of double coincidence of wants.
In other words, when you sell something through the Trade Exchange, you receive instead of receiving money, which is valued at the equivalent of cash rupees. The s you receive against your sales get deposited into your trade account for future use.
When you buy something through the trade exchange, you utilize the that you have accumulated.

Q: What is the Trade Exchange's role in Trade?
A: The Trade Exchange performs the following important functions -
• Market maker: The Exchange allows its members to create a list of products and services that they wish to offer for sale. All members of the Exchange can view these listings. In this manner, the Exchange creates a virtual trading platform simulating perfect market conditions for its members.
• Third-party record keeper: The Exchange maintains the listings of goods and services available on trade, and makes sure that all trade accounts are up to date. It also provides monthly statements to members that reflect all trade purchases, sales and a current balance.
• Clearing House: Through the System of authorizations preceding the step of finalizing a transaction, the Exchange virtually ensures that the seller is assured of payment for the products / services that he sells.
• Banking Services: The Exchange extends various types of loans to its Members to help them tide over periods of scarcity of funds. The Exchange can also provide special payment instruments its members to pay for products / services offered by other Exchange Members.

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