Encointer’s digital local currencies offer a tangible way to reduce income inequality by disbursing a regular allowance to community residents who join regular in-person gatherings. The income comes in the form of tokens that can be spent only within the neighborhood, at participating businesses.
However, while the attraction of a free income is clear, the benefits for merchants accepting the currency may not be so immediately obvious. Here, we outline six ways that joining Encointer’s local digital currency initiatives can help boost your business.
Community currencies issued through Encointer have demurrage built in, which means that over time, the balance held in each wallet decreases. This creates an incentive to spend the money, since otherwise it will be lost – and as one of the places accepting the currency, this benefits you. As a participating merchant, your business gains exposure to the entire Encointer user base, who will regularly be looking for opportunities to spend their currency before it starts losing value. Your business gets a directory listing on the local currency home page, along with Encointer marketing assets to display on your premises or at payment terminals.
Research shows a strong and increasing consumer desire to support local and independent businesses, with a majority citing the local economy as a principal driving factor. Joining Encointer is an ideal opportunity for your business to tap into this shifting appetite and further expand your reach through referrals and word-of-mouth marketing.
Increase footfall by hosting meetups
Encointer’s regular signing gatherings are always face-to-face events requiring a physical presence from the individual claiming the currency. This security mechanism prevents any one person from claiming more than their allowance. It also means that there’s a rota of Encointer groups seeking suitable locations where they can meet up to hold a signing gathering – and since the concept is so new, regular informational meetings are also helpful.
By hosting gatherings for your local community currency, you can also help to increase footfall through your premises, creating organic opportunities for people to spend their Encointer income and providing even more exposure for your business within the Encointer community.
Exchange rate flexibility
Each Encointer currency can define its own exchange rate policy according to local economic conditions. This is helpful for merchants, as they can be flexible in how they apply the policy when setting their prices. For instance, in locations with an unstable national currency, inflation rates can fluctuate widely in the short term, and merchants are forced to update prices frequently.
Encointer communities can opt to issue a currency that’s unpegged from the national currency and instead governed entirely by local market forces. As part of the Encointer merchant network, your business can freely set prices in the community currency based on supply and demand.
If you decide you want to attract more people to pay with the local currency to stimulate a more stable monetary supply, then that is in your hands. You can choose to sell at a slight discount to promote uptake of the Encointer currency, or offer your employees a premium in the local currency as part of their remuneration.
Strengthen local supply chains and support circular local economy
Encointer local currencies can only be spent at participating local merchants, so they help to counteract the so-called “leaky bucket” phenomenon, which describes what happens as money leaks out of local communities to larger chain stores and globalized corporations. While this effect is well-known, the underlying complexities are less well understood.
A 2002 book “Plugging the Leaks” outlines the “local multiplier effect,” which describes the circularity of money in a local economy. Effectively, money taken by one local business being spent at another local business is worth more to the local economy than money that goes to a local business that sources everything from global suppliers.
Encointer merchants are making an active contribution to a local supply chain, supporting this multiplier effect. By spending your Encointer income at participating nearby businesses, you’re also supporting a circular local economy – which means your own business benefits.
Most people would say they support regenerative local economies in principle, but how many of them actually walk the walk? Encointer is a proactive initiative for long-term local financial sustainability. Joining our merchant network can boost your reputation in the community as a business that’s taking active steps to support the local economy. You could even inspire other businesses to follow your lead.
A safe, secure payment channel with no overheads
Most payment methods come with drawbacks. Cash is a security risk and creates operational burdens, whereas credit card and payment networks typically levy fees and require dedicated payment terminals. Encointer only requires a connected smartphone running the Encointer app, and you can begin accepting payments within a few minutes in a way that’s safe, secure, and accessible to everyone.
If you’re in one of our local communities, you can get started with Encointer today by downloading the app. Alternatively, discover more about Encointer on our website, or via LinkedIn.