Will We Barter Again?

Are your humble savings limiting your growth? Do you find it difficult to grow your business while managing expenditures? Then, online bartering could be a solution.

Are you a professional videographer? Accounting perhaps? Yet you don’t have enough savings to paint your house? How about you shoot a video for a painter who is willing to grow his business, in exchange he will paint your bedroom…deal? If so, then you have just engaged in a ‘barter’ exercise.

As a Finance graduate, I have studied the concept of ‘barter’ during my foundational economics class as ‘the exchange of goods and services’ a mean that has evolved over time to the current forms of cash we carry either physically or virtually. In other words, ‘barter’ is looked at by economists as something of the past that no longer exists, yet with the rise of fintech (financial technology) startups such as The Barter Company, SwapRight, BarterQuest, and many more; the topic of barter is back under spotlight as a possible way to trade in a world of limited resources. This method has been specifically highlighted as a way for startups and freelancers to grow their businesses or cover their expenditures without tapping into their cash reserves. A startup business owner might have a surplus of products or unutilized resources, but very limited cash. Online bartering could help accelerate inventory turnover, maximize the efficiency of their human and capital resources while covering the cost of running a business.

Bartering is not limited to SMEs and business enterprises – individuals can also leverage barter as a new way to achieve their aspirations. Websites such as ‘The Barter Week’ offers travelers during a week in November the opportunity to stay at a group of different hotels around the world in exchange for services or products, such as a new smartphone, grocery shopping, etc.  In his article in Financial Times, Gillian Tett pointed out that individuals have always been bartering in the form of social media websites which are built on the concept of ‘barter’; end users get a so-called ‘free’ access in exchange for data. Data is crunched in the backend in a way that is then sold to businesses in the form of insights on consumer behavior to enable them to better develop or promote their products and services. In his article, Tett refers to the work of David Graber who notes out in his book that ‘barter’ never vanished, rather it continued to coexist with new forms of payments.

This topic continues to be debated heavily by regulators, consumer rights protectors and economists on the value of enabling and supporting such activities. Although the earlier mentioned startups and many more continue to grow their barter-based models, yet the concept has not yet gained scale. Hence, the question is: will evolving technologies such as Blockchain, help mainstream ‘Barter’ again?