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The methods and mechanisms to attract/allocate funds in WebMoney Transfer
1. Introduction Developing numerous services for users' interaction WebMoney Transfer is not only a settlement solution for goods/services purchase and sale internet transactions, but as well a comfortable environment for concluding contracts, setting up long lasting partnerships, building at automated business where all commercial activities is integrated online. A market for attracting and offering free/extra title units belonging to users is substantial in its volume; bearing in mind the growth of registrations in the System, it grows fast and is extremely attractive. In order to service the given sector the System offers various mechanisms in order to: - register the relations conveniently - control the mutual fulfillment of obligations - protect from invalid or fraudulent usage of technologies and foresee denial of service incase of breaching the "Anti-money Laundering and Anti-financial Fraud Compliance" The given abstract describes usage of the above mechanisms allowing to attract/offer title units by the users. 2. Common objectives and a list of ready-made mechanisms As a free p2p-system, WebMoney is a body of diverse user communities and their members generate the entire spectrum of individual operations from utility payments to organizing joint commercial activities. However, despite this diversity, the users’ goals and needs in attracting and allocating free title units can be grouped into the following categories:
Perhaps this is an exhaustive list of acceptable demand and purposes in attracting/allocating funds in WebMoney Transfer (a separate chapter is dedicated to classification of known fraudulent credit and depositary, pyramidal and financial MLM-declarations, as well as the algorithms to combat them). WebMoney is the only Web-based system which provides all the necessary services to meet the need of its users to attract/allocate funds:
Getting a general idea of how the algorithms of these mechanisms work will help the user get the most out of WebMoney Transfer, however the above list is only introductive. 3. Using the credit technology to obtain a private loan The technology of making business transactions between WM users is based on the «Credit Transactions Agreement» accepted by each user willing to make such a transaction. The interfaces for credit transactions are described in detail on WebMoney Transfer website in the "User's guide". The key to credit transactions is establishing the identity of the parties involved in the transaction. This is the task of WM’s The identification model is based on the principle of a hierarchical network. Users have to perform certain actions to prove their possession of WMID (complete a personal details form). The documents users fill are certified by the digital equivalent of an autographic signature used in WebMoney procedures. To complete the identification procedure WMID users must present in person their identification documents or send notary public officer certified documents to WM "notaries", i.e. WebMoney clients who have made the corresponding agreement with WebMoney Transfer and paid the license by depositing a significant amount (as of 2005 the required amount is US$ 2000). Such a WM "notary" is granted a special status of a Registrar certificate holder. Registrars create their own archive where they keep copies of the applicants’ documents and send master copies to the Verification Center archive. Persons who have been identified by the Registrar and paid his service receive a "Personal Passport” which allows them (requires a small deposit) to identify WM users and issue "Initial Passports". In this case, Initial Passport issuers keep the "paper" copies of the documents presented by applicants, and the master copies are sent through the Registrar to the Verification Center archive. Persons who receive a certificate (passport) pay the issuer services at the uniform rate set by the Verification Center. In accordance with the WebMoney Transfer Code, WM identified users can access credit mechanisms interfaces (which allows them transferring their own loan notes, creating WMC-type purses and accepting other users’ loan notes, creating WMD-type purses). Holders of personal and higher passports can participate in WM referenda (special procedures arranged by the Holder or by initiative of WM users with the goal of changing WebMoney algorithms). Such user identification system allows meeting the demand of a fast-growing community without changing the structure and, when necessary, to receive identification documents from those involved in a transaction, and, if required, to even present the issuer’s proof of witness for judicial or other «offline» institutions in a standard "paper" format. Thus, persons who have obtained the initial or and above passports can accept the Credit Financing Agreement and receive the essential elements for credit transactions, transfer their own loan notes to other WM users and accept other users’ loan notes in exchange for commodities, services or under other obligations, including loan obligations. At the same time WebMoney provides automatic time and size control of promissory notes redemption by the parties involved in these transactions. In case of failure to pay off loan notes on time WebMoney’s system will block all transactions of the debtor except for paying off the obligations and changes the WMID public credit status (no credits received; all credits repaid; credits haven’t been repaid, credit period hasn’t expired; credits haven’t been repaid, credit period has expired). WebMoney credit technology allows users:
Noteworthy is that presently the credit technology is used rather extensively by WM members in CC type transactions, but the greatest development in the transaction market is expected in DP transactions, especially since the introduction of automated merchant interface with credit purses support. 4. Resources of credit.webmoney.ru Even though the fully functional credit interfaces allow any transactions with WMC and WMD accounts, WebMoney transfer also supports the «credit exchange» service with the help of which users can easily make WMZ loan transactions on priorly agreed conditions. Moreover, the credit exchange allows getting a loan, placing bids with the description of acceptable terms on loan attraction. The rules of the service are described in detail on the Web-site of the service. A distinctive feature of the service is «collective crediting» that allows making MAF type transactions. MAF interfaces can be created even for a single transaction. A potential borrower posts the required loan amount, the repay amount and date, purpose of the loan, leaves his contact details, as well as the contact information of his warrantors (in this case, persons who can recommend the borrower). By posting an application, a potential borrower discloses his/her identity, thus making his/her natural person’s details (from the WebMoney Transfer passport) browsable for potential lenders (WebMoney users with a certification status high enough to create WMC-type purses). Potential creditors can consider candidates and the conditions in their applications based on these data and the borrower statistics and status. If in his or her application a borrower checks off «accept collective crediting», then creditors can either lend the whole amount or participate in lending a share of it. The minimum acceptable amount to participate in the transaction is WMZ 1. In practical application, besides implementing CC and MAF transactions, the algorithm of the service also allows transactions equivalent to the issue of "obligations" for CP. Noteworthy are the facilities of the credit exchange. It does not only list those looking for a loan, but also gives a list of lenders (you can use it to evaluate potential credit market and contact a lender directly by WMK mail). The "Portfolio" interface allows viewing your own transactions within the service. The "Notification" interface instantly brings you the latest postings and information about completed transactions. 5. Issue your own obligations with PAYMER.COM PAYMER service is perhaps the most unconstrained and powerful mechanism to build payment systems. Presently, it seems to be the only functional online system that implements ALL functions of «digital cash»; precisely:
Thus, after becoming a PAYMER user, anyone can issue their own obligations and use them for any kind of payment or capital formation transaction. The existing mechanisms allow holders to check the validity, nominal and property value of obligations, and the automatic reception mechanisms allow using them as means of payment. The redemption mechanism is set when obligations are issued and may allow both engaging an external equity system (like the present-day E-gold) and attracting third parties as warrantors and underwriters. Presently, PAYMER mechanisms are used to issue WebMoney prepaid cards of WMR, WMZ, and WMU types by the Underwriters of these title units, however, any WM user can issue similar type cards (provided they back their security with title units). You can issue your own "card" and it will be accepted in all WebMoney interfaces just like those issued by the Underwriter. And, of course, PAYMER mechanism can be used to issue "commodity" obligations, which, in certain context, could be used as a payment unit (something many ISP’s dream about is that the prepaid cards they print can one day be more than a means to pay for the Internet). PAYMER has a most powerful potential of becoming the choice in financial transactions on the Web both in attracting/allocating funds and building your own prepaid product system. For example, Regulation 266-P by the Central Bank of the 6. Budget Automation Systems Offline businesses have a great experience of all kinds of property attraction/allocation transactions. As a rule, these transactions imply collective joint activity of a large, often uncertain, circle of persons. Moreover, any "enterprise" activity can be reduced to transactions to attract/allocate assets for a certain period of time. Monetary funds (equivalent of the value guaranteed by the government) and commodities, consumables, real estate or equipment (each with its use value) and the cost itself in terms of labor hours of hired workers – all of these can be used as assets. Why can any commercial activity be considered as an investment? Because it is result of joint investments of enterprise owners (who provide infrastructure, funds, and means of production), external partners (who provide services, raw product, funds with delay of payment) and enterprise workers (discharge of duties without an advance payment). Besides, the capitalist manner of production taught society to gamble on what enterprises will come out with, i.e. equity market, and the pursuit of its players is far from the production of surplus value. However, this bookmaker’s game has become a powerful stabilizing factor of an open market, which, on the one hand, saves it from the crises of overproduction by being an indicator of consumer activity and, on the other hand, though seldom, a resource for economy reorientation. Thus, in order to successfully transfer the customary (though complex and inscrutable to many involved in it) «offline» relationship between the productive activity and the equity market game into the Web environment, it is necessary to provide users with the corresponding counterparts of objects, algorithms and interfaces. However, the “online” model can become viable only in the event it is clearer than the prototype and, most importantly, more systematic and "transparent" for:
WebMoney Transfer offers the necessary functionality through its Capitaller and Shareholder services. The Capitaller's Budget Automation System (BA) is a collective management object. BA is a set of algorithms that establish the rules of outgoing payments (budget articles) and profit distribution according to these rules to the WebMoney Transfer BA on behalf of a BA WMID that belongs to and is operated by the holders of the BA management shares. Ownership of the latter is registered in the Shareholder registry. The detailed description of the services can be found on their respective Websites. Here we will briefly cover some of their functional features. According to Capitaller’s rules, BA can be initiated by any WebMoney Transfer user who is a holder of a personal or higher passport. Presently, the number of BA that can be registered for a single WMID is restricted to one. An additional BA can only be registered under a special agreement with WM Operator. In order to register a new BA, the initiator should first set up the new BA options by accepting the service agreements, including the permission to publish his/her personal passport information in the BA documents, and accept the following documents that describe the BA:
After the initiator sets up the new BA and completes all the required information, he receives a personal html-code of the «Managed by Capitaller» button which he/she can place on the Webpage declared as the BA official URL. BA registration may continue only after a verification to make sure the button has been placed on the declared URL (note that according to the system rules the declared URL can only be hosted on a 2-nd level domain). After the URL has been validated, Shareholder registers the BA management stock. Within 30 days the nominal value of the shares must be paid and the management stock must be generated. The initiator creates the management stock by making recipient-oriented or non-target share purchase offers to WebMoney users (only "public" BA can offer purchase of their shares to any WM users) on the "Shareholder” trading site and EXCLUSIVELY for the nominal declared amount per management share. All title units received this way are entered to the purses of the BA management stock. The initiator can start selling the management shares for nominal value only after having entered more than 25 % of the registered amount to the Management stock. Within one year after the BA was registered the initiator cannot sell/transfer his/her 25 % of the management shares. Thus, the Management Stock will either be finalized within 30 day or its size and the share ratio will be automatically adjusted by the service according to the real situation. At the same time, the BA's constitutional instruments and the “Shareholdеr” registry will also be automatically corrected. The title units on the Management stock accounts will be blocked until the Management stock is completely formed. It is noteworthy that the «Make BA public» option is available for new BA’s with incomplete Management stock, as well as for registered BAs. BA publicity allows the holder of management shares to apply for their sale without indicating the buyer’s WMID. Only BAs with a management stock exceeding WMZ 1000 can be public. When the Management stock is finally completed, the budget automation is considered registered, the initiator can access the BA Manager interface, and the share holders can access the Voting and Dividends interfaces. Besides, both the BA Manager and the holders of more than 10 % of the Management stock can browse «the Holders’ Registry». The shareholder’s interface allows:
The BA manager’s interface allows:
The voting algorithm is the major factor of joint BA management. Any management share holder or budget automation manager (even if (s)he is not a share holder) can initiate an open vote procedure. The initiator personally words the voting questions in an accessible way so the voters can make up their mind and vote pro or contra. There are two types of voting procedures: «instructions to the manager» and «autoexecution». «Instructions to the manager»: as BA authorized manager and interface administrator, the manager makes decisions based on the voting results. Management share holders oversee fulfillment of the decisions and judge about the manager’s proficiency by the delivered results. «Autoexecution»: enabled by the Capitaller voting interface and automatically executes the decisions immediately after they are accepted. Autoexecution procedure is an essential element of maintaining a real collective BA management. Autoexecution is used for: revenue distribution plans, appointing managers, Management stock administration and increase. According to the Capitaller rules, external earnings into the budget automation can only be routed to the special account references or “income purses”. Establishing the purse income distribution rules is the exclusive competence of the common decision of share holders and is performed only by "autoexecution" voting: 75% pro with a more than 50% quorum. The same conditions apply for appointing a BA manager who takes over the interfaces to administer access rights to all BA purses, except for the income and management stock purses. Besides, a BA manager, after voting approved, can automatically send out voting notifications to the shareholders’ WMID. Another exclusive procedure of autoexecution is the Management stock purse. Only autoexecution voting with 50 % pro and a more than 50 % quorum will allow transferring title units from a Management stock purse to any references (outgoing and dividend payments, etc.). 75 % pro and a more than 50 % quorum is necessary to increase the Management stock. When voting is initiated, it should be mentioned to what proportion the Management stock increase is suggested. Integral values only are allowed, i.g: x2. After positive voting offers are automatically created for all shareholders (except for BA itself) to purchase the proportional number of shares for their nominal value. The offer is valid within 30 days. Upon completion of the period the offer is dismissed and the shares that haven’t been purchased are terminated. The voting initiator determines how long the voting will be in progress. The decision on the voting is made after the voting is over on the basis of the open journal. Since the Capitaller service does not block sale/transfer of shares for the time of voting, the voting status is purely indicative. The voting result is considered to be the outcome at the time the voting procedure is over. Any shareholder can initiate the voting to appoint a new manager or to distribute revenue, as well as the «instruction to the manager». The manager, or a person authorized by him, can access the complete voting list for initiation. The interaction between shareholders, manager and staff are made transparent to provide an efficient reporting mechanism for the BA purses. Reports are automatically generated based on the previously set options. The report-generating options include:
When BA is registered, the following mandatory reports are automatically created and are accessible to its management stock holders (described in the Constituent declaration):
BA Manager can create additional reports at his/her own discretion or by decision of Management Share holders. In order to provide a full overview of Capitaller/Shareholder resources, it is worthwhile mentioning that BAs can be liquidated. To liquidate a BA, a WMID user with a personal passport would have to obtain 100 % of the Management shares. Then the «Liquidate BA» option will become available in the manager’s interface. By choosing this option the WebMoney user attaches the BA WMID to his/her personal passport and the Management shares are excluded from the Shareholder registry. Thus, WebMoney users can use the Capitaller/Shareholder services to register customary industrial or commercial transactions FREE OF CHARGE. Moreover, they can enjoy the transparency, auditing efficiency and comprehensive reporting to all involved in the activity which is comparable to the standards of "offline" equity market leaders. 7. Mechanism of fiduciary property management To round up this overview of attracting/allocating mechanisms in WebMoney environment, let’s talk about an outside partner service - INDX Transaction System (INternet Direct eXchange). INDX uses WebMoney as an electronic currency for users (traders) to purchase/sell instruments (notes), as well as for INDX users identification (certificates and interfaces). INDX transactions are performed automatically according to exchange model with application queues. You will find a detailed description in service rules. We are only going to cover the general organization of the process. Any WebMoney Transfer user may organize tenders on INDX. To do this, you have to conclude the corresponding agreement with INDX Holder and pay the services. Such a user acquires the status of an INDX section Broker. Read the «Broker clause» for more information on how to become a Broker and the opportunities that come with the status. INDX allows transactions with the instruments (notes) of a unique legal nature: formalized electronic bearer obligations based on a fiduciary management agreement between the Broker and the instrument Issuer who has transferred his rights or property to the Broker. Notes have a conditional nominal value set by the Broker during instrument registration. All rights and rules regarding the use of the note are based on the fiduciary management agreement between the Broker and the Issuer. In practical terms, it means that any instrument on INDX is a scope of rights under certain fiduciary management agreement and can be extinguished (exchanged) for these rights on the conditions stipulated in the agreement. All fiduciary management agreements between the Broker and the Issuer must correspond to the standard agreement published on the website. Thus, any rights/property owner, having made a fiduciary management agreement with the Broker and having paid the service fee, becomes the Issuer of the registered instrument and can trade it in the Transaction system. As you can see, this mechanism allows, on the one hand, calling for funds in exchange for concession of rights under fiduciary management agreement, and, on the other, investing the funds on the security of the rights under the agreement. At the same time, the Broker, who performs auditing and pays dividends under the fiduciary management agreement, acts as an independent party between creditors and debtors. Such form of relationship is more convenient than a security loan relationship, because it allows solving the problem by giving the rights on the collateral to a randomly generated and changing group of loaners versus a single loaner. When necessary, loaners can easily sell their secured rights to third parties. Moreover, you can pledge property that costs more than the amount you borrow by selling only a part of the instruments registered by the Broker under the fiduciary management agreement. Issuing instruments under the agreement of fiduciary management of “offline” companies and their stock can become a special form of liability management by way of INDX transaction systems. Then the owner of the company, may it be a small one and without any prospects to get to the stock exchange, will be able to offer the market its instruments, and the Broker will regularly do all the auditing, supervision and reporting to the owners of the rights under the fiduciary management agreement. Transition to such form of relationships will most certainly promote proper assessment and higher solvency of small companies. It is on the front burner, especially when a market like «Business for Sale» is rapidly developing but lacking adequate methods of assessment and precise and transparent algorithms of transactioning and mediatorship. 8. Summary The mechanisms described above cannot exhaust the attraction/allocation methods that can be used in WebMoney Transfer. There are other partner services and sites. WebMoney is being constantly improved and comes out with new algorithms. When you ALLOCATE your funds, it is important to understand that you alone, as the holder of assets, independently and of your own will make decisions to participate in transactions. It is important to remember that open CALLs for FUNDS are often more actively advertised, including by sham or inadequate persons who tend to overstate their financial capabilities. Please remember that the Web is only an environment for transactions and any services you find there are designed to help you. However, it is up to you to make the choice. Contracting party’s identification remains a crucial issue in online business. And just like in any offline business, it helps to understand the origin of the declared profitability and to be able to identify transaction types as we made it in paragraph 2. However, despite the existing risk of online funds attraction/allocation, the advantages of the new and growing environment are irrefutable. It is a huge market without boundaries where precision, speed and freedom of transactions dominate.
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