With two community currency launches under our belt in 2022 and more in the pipeline for 2023, the Encointer team spends a lot of time talking to local businesses about what’s involved in adopting a community currency. In doing so, we’ve come across several myths that often hold businesses back from embracing local currencies.
Here, we round up five of the most common myths and misperceptions surrounding community currencies.
Myth 1 – They’re a charitable initiative
Encointer community currencies help to expand economic activity in your local area. While boosting the local economy feels good, it doesn’t require any act of charity on the part of participating businesses. Adopting Encointer can help to increase your turnover and you can spend the currency you receive at all other participating businesses, strengthening the local supply chain.
One outcome of successful local currency initiatives is to prevent the so-called “leaky bucket” principle from playing out by retaining more spending power within the community. Businesses serving local communities are among the biggest beneficiaries of this effect.
Myth 2 – They require specialist knowledge or staff
Rest assured that your business doesn’t need an IT specialist on staff to get up and running with Encointer’s digital local currencies. All the technical wizardry is in the background, running like clockwork, so anyone who can operate a smartphone can start taking payments. It only takes a few moments to download the Encointer app, which is user-friendly, accessible, intuitive – and free of charge.
To take a payment, tap “Receive,” enter the price, and ask your customer to scan the QR code with their Encointer app. That’s it. Payments take around 12 seconds to settle, which is even faster than cash, and with no risk of fraud or theft.
Myth 3 – They’re financially risky
There is no financial outlay or risk involved. As a merchant, accepting Encointer is cheaper and safer than most other types of payments. There is no need for a cash float, payment terminals, or bank accounts. You just need a smartphone to set up a free Encointer account using the app.
The rules governing the issuance and value of the local currency are transparent and available to all participants from the outset. While every local currency initiative is somewhat experimental, as success depends heavily on community uptake, Encointer’s local currencies are designed to support local communities in a way that’s economically sustainable, fair, and low risk.
Myth 4 – It’s a distraction from my core business offering
As Encointer is so easy to set up and use, adopting a digital local currency as a payment method for your business doesn’t take up any substantial time or resources.
Moreover, Encointer’s community currencies are designed to complement your core business offering. Becoming an Encointer merchant can help to attract new customers looking for ways to spend their local currency, or who otherwise wouldn’t have been able to afford to buy your products or services. New clients may also bring in business in traditional currency – for example, if they don’t have enough of the local community currency in their Encointer wallet to cover their purchase, or if they bring companions along.
If it’s feasible, you could also host Encointer gatherings on your premises, reaching even more potential new customers. Joining Encointer can also boost your reputation in the community as a business that proactively supports the local economy.
Myth 5 – Local currency schemes are too small/niche
While some have struggled to gain traction, there are several examples of local currency schemes that have proven very successful. In designing Encointer, we’ve also learned from those that encountered problems. For instance, in some cases, the need to print physical cash created unsustainable overheads, but Encointer avoids this pitfall with digital currencies.
However, one of the biggest success factors for local currencies is participation. The greater and more enthusiastic the uptake by local businesses and residents, the better the chances of making a local currency a success.
Now that we’ve dispelled some of the myths around digital local currencies, read more about the real-world benefits that adopting an Encointer community currency can bring to your business.
Encointer is already operating two successful community currencies in two very different locations – LEU in Zurich, Switzerland, and Aslah in Kigali, Rwanda. You can read more about how easy it is for merchants to get on board with LEU here, or discover more about Encointer, our app, and communities on our website.