Borrowing & Lending Online with the Webmoney Debt Service
Mark Herpel
June 16, 2011
Global leader WebMoney Transfer offers a robust system of online credit payments. Known as WebMoney "Credit Transactions" these payments may be used by any WM-customers to buy goods and services or to provide credit financing for other users. The terms of a loans, including the credit amount and period, are automatically fixed in the WebMoney history log for both creditor and debtor. Additionally, each transaction is monitored for a timely repayment. Need a loan? Set the amount and terms then find a lender. ($500 max.)
From the WebMoney site, http://debt.wmtransfer.com/?lang=en , this is a nice sliding scale tool that helps lenders find borrowers. If you need a loan, you set the terms and see what funds are available from each individual user. If you have money to lend and want to earn interest, you set the terms and wait for a borrower. Of course, there is no FDIC in Russia and it should be clear that these loans are not guaranteed by any central authority. These are person 2 person transactions.
Anyone granting a loan may also want to set an acceptable level of identification for that borrower. Screening potential borrowers starts at the standard Alias Passport level and progresses on up to the users providing the most disclosure -- called the Merchant Passport.
Because these loans can encourage and stimulate business for online retail companies, this type of "in house financing" structured through WebMoney's credit services has become very popular. By offering customers the ability to "buy now, pay later", the lending e-business expands its market to include all interested customers regardless of their current cash resources.
One of the most attractive reasons for making a loan is the ability to help finance your own business customers. Many customers want to do business at different times during the month but may not have the funds available. This WebMoney credit service permits uninterrupted business through any customer's fund shortages. Credit payments may also help a company to restock a business with additional merchandise while waiting on the clearance of other incoming payments such as credit cards. The ingenious WebMoney system automatically keeps track of financed amounts, financing periods, payment history, and repayment of credit.
The ability to offer this in-house credit is an exclusive opportunity available only to users of the WebMoney system. This direct P2P connection between "known" WebMoney account holders greatly simplifies the procedure of establishing trust between a business and its customers.
Please note that WebMoney does not directly participate in the financing. The WebMoney system only provides the software platform for the P2P loan and other various type of credit transactions.
WebMoney credit services offer many benefits.
Expanding customer base
Offering customer financing allows e-commerce businesses to significantly expand their customer base. Providing credit to customers also attracts Internet users that may not have a credit card or have not yet had the opportunity to shop online. Issuing credit is the perfect financial vehicle to attract new online shoppers.
Transitioning from "free" to "paid" services
Customer financing can become a key transition instrument for an online business that started out as a free service but is now facing the necessity of becoming a profitable enterprise.
Establishing new markets
Credit helps to overcome price objections from potential customers. Offering that new customer a line of credit generates a wider appeal and attracts new customers because the service becomes affordable to a much larger consumer base. Credit can bridge the gap for a new product and speed up that process of building a loyal customer base.
Overcoming the distrust barrier
Many potential customers pass through an online store or catalog only browsing without making a purchase. The first time buying from an online store, new customers are often unsure is their goods will even arrive. Credit lending helps to overcome this insecurity. Upon receiving the ordered goods, that new customer is satisfied with that first experience, happy to re-pay the credit and generally becomes a return customer. The issuing of credit can be critical for making that first sale. By financing its own customers, an online business builds a level of trust with each customer. The extension of credit underscores the business's own financial stability and trustworthiness. The WebMoney credit system is used by the most reputable and stable businesses online businesses.
WebMoney's debt service is an online tools for managing debt relationships between members. All loans are denominated in WMZ which is the U.S. Dollar unit. Before lending funds to another user, that account holder must first set a trust limit for the potential borrower. Here are some details of the trust limit which represents an offer for concluding an "Agreement for the Loan of Title Units" on the these conditions:
After a first loan transaction, an open trust limit remains in effect indefinitely for these users. The value of the TL is directly proportional to the number of correspondents who have granted a trust limit, the amount of funds trusted to him/her, and maximum disbursement period. The trust limit value can serve as a sort of credit rating and perhaps could be used to gauge a level of the trustworthiness for that user.
WMC is the WebMoney Transfer title unit that is a USD/WMZ equivalent for credit transactions. This is the C purse in the Keeper software.
A WMC purse is used to keep a record of received credits and for this reason, a user may only have one WMC purse and never delete it. It stands as a record for that user's credit history. WMC title units are technically promissory notes (obligations to transfer a respective number of WMZ title units by a maturity date) to creditors of the WMC purse owner. The number of units in the WMC purse corresponds to the number of WMZ units that must be transferred to pay off that loan. The C purse transaction history stores records of promissory notes issued to creditors.
WMD is another title unit of the WebMoney Transfer system that is USD/WMZ equivalent for credit transactions. The D purse is used to keep a record of received credits and like the WMC purse, a user can only have one and may never delete it.
Credit repayment
If the loan is a good one, credit repayment should be the final part of any WebMoney credit transaction. Loans can be repaid in part, in full, ahead of schedule or even at the very end of the Loan Period. All debt paid back to the originating loan purse must only come from the borrower's loan purse...no third party transactions are possible. If there is not enough money in the original purse, funds will be taken from the user's other purses.
When the borrower has cash reserves again, the repayment of that loan is a very simple process. The borrower opens up the transaction history of the WMC purse and selects one of the existing loans. Clicking "Repay credit" inside this purse begins the repayment process. The specified amount of WMZ is then transferred from debtor to creditor, and the amount of that exchange is automatically adjusted in WMD and WMC. The actual funds are transferred dollars (WMZ purse) and the WMD & WMC purses keep track of the payments and receipts. The C & D purses provide the bookkeeping element of a credit transaction.
If you fail to repay your debt within the specified loan terms under the credit transaction, WM Keeper software will render your account frozen and you loose the ability to send or receive any funds. If you default on a loan, the only possible transactions after a default in this frozen account is repayment. Once that loan is repaid, the account will then become active again.
Credit can only be considered repaid using the C and D purses. If a user makes a casual loan from the WMZ purse and does not use the WMC and WMD resources in the Keeper software the system does not consider it a loan nor a repayment. All loans must be registered through WMC/WMD purses. All trust transactions are registered at the Paymer Service, Paymer e-checks having legal force and can be used/presented at court.
For more information also see Debt Mart: http://wiki.wmtransfer.com/wiki/show/Debt+Mart
From the WebMoney site, http://debt.wmtransfer.com/?lang=en , this is a nice sliding scale tool that helps lenders find borrowers. If you need a loan, you set the terms and see what funds are available from each individual user. If you have money to lend and want to earn interest, you set the terms and wait for a borrower. Of course, there is no FDIC in Russia and it should be clear that these loans are not guaranteed by any central authority. These are person 2 person transactions.
Anyone granting a loan may also want to set an acceptable level of identification for that borrower. Screening potential borrowers starts at the standard Alias Passport level and progresses on up to the users providing the most disclosure -- called the Merchant Passport.
Because these loans can encourage and stimulate business for online retail companies, this type of "in house financing" structured through WebMoney's credit services has become very popular. By offering customers the ability to "buy now, pay later", the lending e-business expands its market to include all interested customers regardless of their current cash resources.
One of the most attractive reasons for making a loan is the ability to help finance your own business customers. Many customers want to do business at different times during the month but may not have the funds available. This WebMoney credit service permits uninterrupted business through any customer's fund shortages. Credit payments may also help a company to restock a business with additional merchandise while waiting on the clearance of other incoming payments such as credit cards. The ingenious WebMoney system automatically keeps track of financed amounts, financing periods, payment history, and repayment of credit.
The ability to offer this in-house credit is an exclusive opportunity available only to users of the WebMoney system. This direct P2P connection between "known" WebMoney account holders greatly simplifies the procedure of establishing trust between a business and its customers.
Please note that WebMoney does not directly participate in the financing. The WebMoney system only provides the software platform for the P2P loan and other various type of credit transactions.
WebMoney credit services offer many benefits.
Expanding customer base
Offering customer financing allows e-commerce businesses to significantly expand their customer base. Providing credit to customers also attracts Internet users that may not have a credit card or have not yet had the opportunity to shop online. Issuing credit is the perfect financial vehicle to attract new online shoppers.
Transitioning from "free" to "paid" services
Customer financing can become a key transition instrument for an online business that started out as a free service but is now facing the necessity of becoming a profitable enterprise.
Establishing new markets
Credit helps to overcome price objections from potential customers. Offering that new customer a line of credit generates a wider appeal and attracts new customers because the service becomes affordable to a much larger consumer base. Credit can bridge the gap for a new product and speed up that process of building a loyal customer base.
Overcoming the distrust barrier
Many potential customers pass through an online store or catalog only browsing without making a purchase. The first time buying from an online store, new customers are often unsure is their goods will even arrive. Credit lending helps to overcome this insecurity. Upon receiving the ordered goods, that new customer is satisfied with that first experience, happy to re-pay the credit and generally becomes a return customer. The issuing of credit can be critical for making that first sale. By financing its own customers, an online business builds a level of trust with each customer. The extension of credit underscores the business's own financial stability and trustworthiness. The WebMoney credit system is used by the most reputable and stable businesses online businesses.
WebMoney's debt service is an online tools for managing debt relationships between members. All loans are denominated in WMZ which is the U.S. Dollar unit. Before lending funds to another user, that account holder must first set a trust limit for the potential borrower. Here are some details of the trust limit which represents an offer for concluding an "Agreement for the Loan of Title Units" on the these conditions:
- maximum loan amount;
- maximum disbursement period;
- the manner of credit repayment;
- daily rate of interest for funds usage;
- purse number from which funds will be granted.
After a first loan transaction, an open trust limit remains in effect indefinitely for these users. The value of the TL is directly proportional to the number of correspondents who have granted a trust limit, the amount of funds trusted to him/her, and maximum disbursement period. The trust limit value can serve as a sort of credit rating and perhaps could be used to gauge a level of the trustworthiness for that user.
WMC is the WebMoney Transfer title unit that is a USD/WMZ equivalent for credit transactions. This is the C purse in the Keeper software.
A WMC purse is used to keep a record of received credits and for this reason, a user may only have one WMC purse and never delete it. It stands as a record for that user's credit history. WMC title units are technically promissory notes (obligations to transfer a respective number of WMZ title units by a maturity date) to creditors of the WMC purse owner. The number of units in the WMC purse corresponds to the number of WMZ units that must be transferred to pay off that loan. The C purse transaction history stores records of promissory notes issued to creditors.
WMD is another title unit of the WebMoney Transfer system that is USD/WMZ equivalent for credit transactions. The D purse is used to keep a record of received credits and like the WMC purse, a user can only have one and may never delete it.
Credit repayment
If the loan is a good one, credit repayment should be the final part of any WebMoney credit transaction. Loans can be repaid in part, in full, ahead of schedule or even at the very end of the Loan Period. All debt paid back to the originating loan purse must only come from the borrower's loan purse...no third party transactions are possible. If there is not enough money in the original purse, funds will be taken from the user's other purses.
When the borrower has cash reserves again, the repayment of that loan is a very simple process. The borrower opens up the transaction history of the WMC purse and selects one of the existing loans. Clicking "Repay credit" inside this purse begins the repayment process. The specified amount of WMZ is then transferred from debtor to creditor, and the amount of that exchange is automatically adjusted in WMD and WMC. The actual funds are transferred dollars (WMZ purse) and the WMD & WMC purses keep track of the payments and receipts. The C & D purses provide the bookkeeping element of a credit transaction.
If you fail to repay your debt within the specified loan terms under the credit transaction, WM Keeper software will render your account frozen and you loose the ability to send or receive any funds. If you default on a loan, the only possible transactions after a default in this frozen account is repayment. Once that loan is repaid, the account will then become active again.
Credit can only be considered repaid using the C and D purses. If a user makes a casual loan from the WMZ purse and does not use the WMC and WMD resources in the Keeper software the system does not consider it a loan nor a repayment. All loans must be registered through WMC/WMD purses. All trust transactions are registered at the Paymer Service, Paymer e-checks having legal force and can be used/presented at court.
For more information also see Debt Mart: http://wiki.wmtransfer.com/wiki/show/Debt+Mart
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