In the left example underneath: the invoices sent by the actors form a payment circle. Our algorithm is programmed to recognize this as a financial circle where $ 5.000 can be netted out of every party’s owed amounts. The remaining result will be the right example underneath, where the total receivables have increased and simultaneously the payables have decreased by $ 5.000 for each one in the circle.
Through circular netting, receivables will cancel payables without having to move any money around.
As a result, the quantity and amounts of pending transactions for the three actors in the circle have been reduced. Troc Circle decreases the working capital needed to cover expenses on time.
Troc Circle works on an upgrade of the algorithm where it can play by itself a closing role in a financial circle. In the example you can see that a payment chain is formed. Troc Circle is playing a middle role in order to complete the circle and perform the reduction of debt between the actors. Troc Circle will give incentives to the first seller and the first buyer allowing payment chain netting to happen.
TROC CIRCLE TURNS PAYMENT CHAINS INTO CIRCLES
Once the buyer pays out, the payment is automatically split between seller and sub-seller reducing the number of transactions and increasing the velocity of payments. At the moment Troc Circle allows ACH or SEPA payments, due to their low cost & flat commission fees. Sellers need to register as a merchant, automatic KYC & AML checks and OFAC & sanctions screening in real-time is handled by our payment processor partner.