P r o j e c t

Easy-to-use mobile app offering a follow-up service of off-line cash exchanges/short-term peer-to-peer

microcredit within communities of mutually-trusted people, with real-time clearing of mutual

obligations and designated-time direct-debit net settlement

Vision

Principle

Within a circle of trusted friends, there are often off-line exchanges of cash

Man, I’m short of cash –can you advance me?

Punctual illiquidity

OK guys, let’s not split hairs here, I’ll foot the bill, you’ll

pay me back laterConvenience

Wouldn’t it be great to have a system to keep track of these exchanges and automatically settle mutual imbalances?

People choose friends and form circles of mutually trusted people

A’s Facebook Friends

B’s Facebook Friends

C’s Facebook Friends

D’s Facebook Friends

• B• C

• A• C

• A• B

• C• E

Etc.

Import…

• R• D

• R• J

• E• D

• F• X

• F

• Y

A

B

C

D

E

F

G

Circle 1

Circle 2

Circle 3

Pick up trusted friends from existing social networks

Each circle is composed of mutually trusted friends1 2 3

Note: C and F happen to belong to two different circles

Friends make off-line exchanges of money

To whom did you just hand out money?

Notifying

Hey. Just handed you

Can you confirm?

$9.7

0

Salma

= 5.3 + 3.4 + 1

Acknowledging

On Salma’s phone…

Push notification [Name of platform]

Hey. Just handed you 9.7$

Can you confirm?

YES NO

The system records the transaction and

recognizes an obligation from Salma to You

You

Salma

Other mutual friend

9.7

Time Event Social graph Real-time clearing per circle

0

Within a circle, mutual obligations are centralized and cleared in real time

A

B

C D

E F G

A

B

C F

D

C

E G

F

A

B

C F

D

C

E G

F+3

-3

-1

+1

+2

-2

A

B

C-2

A

B

C D

E F G3 1

2

A

B

C D

E F G3 1

22

-1

+3

A

B

C D

E F G3 1

22

5

3

A

B

C D

E F G3 1

22

5

3

A

B

C F

D

C

E G

F-2

-3

-5-1

+3 -1

+9

+2

-2

4 A

B

C+2

-1

-1

1 • A hands 3 to B• E hands 1 to C• F hands 2 to G

2 • B hands 2 to C

3 • E hands 5 to D• E hands 3 to F

4 • C hands 4 to A F

D

C

E G

F-3

-5

-1

+9

+2

-2

F

D

C

E G

F-1

+1

+2

-2

At a designated time, the system automatically settles the mutual obligations per circle

A

B

C F

D

C

E G

F+2 -3

-5-1

-1 -1

+9

+2

-2

Circle 1 Circle 2 Circle 3

C is net creditor in circle 1: +2 C is net debitor in circle 2: -1

No cross-circle clearing possible to avoid situation where a net creditor’s refund depends on the solvability/liquidity of someone n degrees of trust away

When subscribing to the platform, users agree to a direct debit framework whereby they authorize the payee (the platform) to collect the amount due directly from the payer’s account.

Direct debit agreement

At settlement time, the platform debits the net debitors’ bank accounts and makes money transfers to the net creditors

Settlement

Settling

Net debitor’s

bank

Platform’s bank

Net debitor

Net creditor’s

bank

Net creditorPlatform

Collects amount due

Lends to

Owes to

Money transfer

Net creditor’s bank account is refunded

Monthly settlement…

A

B

C+2

-1

-1

Circle 1• A’s account is debited by 1

• B’s account is debited by 1

• C’s account is credited by 2

Creditor-bank direct debit agreement (“contract”)

Platform-debitor direct debit agreement (“mandate”)

Debits net debitor’s bank account

Sends amount due

13 5

Sends amount due 2

4

Credits platform’s account

Orders money transfer

6

7

8

In other words, it’s a system of short-term, peer-to-peer

microcredit

1. Risk of counterparty illiquidity/insolvability But, hey:

2. Business model easily reproducible But, hey, which business model is not?

3. What if off-line pre-DTNS* settlement? It’s just like any other loan –just don’t forget to notify it on

the platform

4. Won’t I look like a skinflint?

Weaknesses

* Designated-Time Net Settlement

- They’re small amounts- They’re friends/trusted people

Appendix

Mandatory fields

Unique mandate reference Name, address, postal code, country of residence of debtor Debtor’s IBAN number BIC code debtor bank Creditor company name Creditor’s identifier Address, postal code, country of the creditor Type of payment Contract Reference Signature place and time and signatures

B2C SEPA Direct Debit Mandate – Template

Creditor can decide on the format

The dematerialised Mandate-related information is transmitted by the Creditor Bank to the Debtor

Bank as part of each Collection, in one single flow