Cyclos; e-pay innovation award winner

How can Cyclos organise a poor economy properly?

Cyclos is solid payment software that can easily be extended to increase its service for the regional economy. Please have a look at for all the features of Cyclos.

We don’t tell you a secret when we say that money works for the banks and the very rich. Normally, money leaves a poor region long before all possibilities of businesses and employees have been connected in the process of production and exchange. Cyclos can make money work for poor communities/regions by increasing local circulation of purchasing power.

Cyclos is a solid tool to provide mobile wallets

Wallet 1 represents a normal current account linked to a mobile wallet similar to what is presently offered by banks: users can spend their money wherever they wish. As a result, the money in poor regions quickly flows out of the regional economy since it is used to pay for imported goods or to buy at large (international) supermarket chains.

Wallet 1 money does not facilitate sustainable economic activities in poor regional economies, because imported products such as tv-sets, washing machines and smartphones are bought, before the money circulated a few times locally. It leaves the economy before it can link local producers to local consumption. The money should follow a detour within the local economy in order to strengthen the poor economy. Then, local businesses will earn more and can employ more people and also tax income increases…

Using Cyclos, money can be reprogrammed to circulate longer in a region. Money then is spent more often in the poor economy before it is used to buy imports, and thus, boosts local economic activities, income and jobs.

Reprogrammed money: by using a second wallet.

A Wallet 2 account only facilitates payments to other region accounts. Basically, money is reprogrammed to stay longer within the local economy as long as it stays in Wallet 2

The following steps correspond to the numberings in the image above:

Step 1: There are already millions of Cyclos users in South East Asia and Africa. These users already have a Wallet 1 provided by the local provider. These providers can offer a “Wallet 2” account at the push of a button. Other people that do not have a Cyclos account can easily open a mobile payment account Wallet 2, download the app to their mobile phone to get access.

Step 2: Migrants send their money using the Wallet 2 account that they share with their families back home. Once it enters there, that money is reprogrammed to better serve the local economy. It creates more income for local businesses, allowing them the chance to grow and create jobs within the local economy.

Step 3: Cyclos software sets the condition when money in Wallet 2 can be exchanged for money in Wallet 1. From wallet 1, the money can again be used for imports. The real difference is that the local economy was served better.

Money circulates locally for a defined period

Cyclos has a built-in timer capability based on innovative algorithms. The timer can be used to define when money may leave the region. Every accountholder sees how many days that moment is away. The software deals with the fact that the money of each account originates from many sources and probably each with a different number of days and calculates what the number of days for each account. The timer is activated as soon as money enters the Wallet 2. This is illustrated below.

Note that the arrow that represents imports is still as big as it was when we there was no a regional currency. The amount of money available for trade with the outside world will be no different from what it would have been otherwise. But now, there is increased production by local companies for local clients and clusters of new businesses have become stronger, supporting increased export.

Social Trade Credit: Cyclos can create counter cyclical credits

Social TRade Credit makes high risk credit available based on contributions by actors along the supply chain where additional sales are created. In this image (to the right) the total contribution to the default risk is 11%.

Cyclos facilitates Social Trade Credit. This type of credit can be used in underperforming economies facing spare capacity to introduce additional credit. The credit is enabled by participating companies (profiting from the network) sharing in the burden to secure the credit risk.

The most effective way to reduce poverty is to enable people to produce and consume locally/regionally.
To that end poor regions need tools that ensure that money is not sucked out of the region prematurely.