Bartercard comes to India in 2008

The dated barter system, where products and services used to be traded in cashless transactions, is set to get a new lease of life in India with world's largest exchange for such trade, Bartercard, foraying in the country early next year.

Australia-based Bartercard said on Monday it would commence India operations early in 2008 and the licence for the country has been already sold.

"Deposits have already been taken for both India and South Africa with both expected to commence operations early in 2008," Bartercard Plc Executive Chairman Wayne Sharpe said in a statement to announce the company's 15-month financial results.

According to Bartercard, India is the largest market yet to be entered by the group that is already present across 12 countries. Unlike credit or debit cards, Bartercard needs to be recharged with customers' own goods and services, and not cash.

But barring the involvement of cash, a Bartercard transaction is similar to those through a credit or debit card. Members receive a plastic card and an interest-free line of credit. Trade points (in terms of the currency) are credited to member's account upon the sale of goods and services through the exchange.

Members use their Bartercard transaction card to spend their credit balance or draw on interest-free line of credit, on goods and services from any other member.

Bartercard is the world's largest barter exchange and provides business opportunities for companies who barter their goods and services.

The barter trade market in India largely comprises of smaller firms with exceptions like Net4Barter, which has a client base of about 1,000 companies. 

In March this year, Bartercard had announced the sale of India licence to entrepreneurs Rakesh Thapar and Ashoka Bhanwarlal Motha.

The recruitment of the management team as well as training of personnel in Australia and India is believed to have already begun for its India operations.

While announcing the sale of India licence in March, Sharpe had said "India is a huge market with great potential and we are delighted to have made this licence sale."

With a membership of over 55,000 smart businesses in 12 countries around the world (over 23,000 in Australia), Bartercard enables member businesses to exchange goods and services with other member businesses while saving cash and without having to engage in a direct swap of goods.

Rather than the usual 12 months, the company on Monday announced results for 15 months to take into account the de-listing of its shares, followed by a substantial corporate restructuring towards going private.

This included a share consolidation of 1,000 to one, and a partial buyback of shares of small shareholders by Sharpe, taking the total shareholder base to about 700 -- down from over 4,000 as a public company.

Bartercard reported a net profit after tax of 8.6 million Australian dollars for the 15-month period ended June 30 as against a loss of 8.1 million Australian dollars for 12-months ended March 31, 2006.

The total revenue was 59.8 million Australian dollars, up from 52.8 million Australian dollars in 2006.