Setting Objectives, cont.
Commercial Purpose Currencies
There are a wide variety of commercial purpose currencies that are
defined by the kind of exchange relationships they are designed to
facilitate or encourage. The four main categories are:
• Business to Business (B2B);
• Business to Consumer (B2C);
• Consumer to Consumer (C2C); and
• Consumer to Business (C2B).
They take typically electronic forms (see classification by support medium
below), and result from the dramatic cost reductions in data processing
technologies over the past decades.
Business to Business (B2B): These complementary currencies
usually are exchange units created by businesses to facilitate exchanges
with suppliers and wholesale customers. For instance all the
contemporary so-called “commercial barter currencies” fall into this
category. There are well over 500 such commercial barter systems,
particularly in the US, regrouped under two trade associations: the
International Reciprocal Trade Association (IRTA) and the Corporate
Barter Council (CBC).
Business to Consumer (B2C): The most widespread complementary
currency today are “loyalty currencies”, issued by a business or a group
of businesses to encourage client returning to them. “Frequent flyer
miles” are the largest such system today, with 1.5 trillion miles issued
yearly worldwide by five major airline alliances. One older, and still very
common paper-based variety of such system are the ubiquitous “discount
vouchers” redeemable for goods or services in retail shops and
supermarkets.
In the UK, Tesco has grown to become the largest supermarket chain on
the strength of its loyalty currency system which it developed into a fully
fledged complementary currency system. Tesco introduced in the mid
1990s a remarkably successful loyalty program that forced rival retailers
to follow suit. One in three UK households now are Tesco card members
and their Clubcard magazine is Europe’s largest circulation customer
magazine.
Consumer to Consumer (C2C): At some level, one can describe
much of the conventional payment system managed by the banks (i.e.
checks, cash payments, etc) as a commercial C2C system. Outside of the
banking sector, the “pay-pal” payment system is a successful example of
this approach extensively used by the e-Bay online auction system,
although it is also exchanging only conventional money at this point.
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