Transaction Control

Lichen will help online buyers and sellers to assert their full legal prerogatives in controlling the cost of their transactions.

What Does it Cost to Pay?
Once it’s launched, Lichen can be used to enable independent services that inform buyers and sellers about transaction costs.

Both conventional and novel payment methods have been expanding the opportunities for market participants to control their transaction costs. However, this proliferation of options—each with its own complexities—easily confuses intended users.

When Lichen is integrated into a commerce platform, users will be able to leverage their purchase order data, to immediately learn which payment or remittance method would likely afford them the lowest total transaction cost amongst available options. Just prior to payment, the relative costs of payment options are shown to buyers.

Respecting all appropriate disclosure controls, actual transaction cost data generated by subscribers to BuyMyData can be combined with the results of available controlled studies about the relative costs of payment methods and of remittance methods. Synthesized results in the form of summary indicators are made available on-demand through Lichen, through a secure and neutral service. That’s to say, much of the hard work that analysts put into obtaining and structuring these types of empirical research studies in commerce and payments can be used to enhance ongoing Internet services for the operational support of algorithmic commerce, and for informing buyers and sellers seeking information on factors relevant to their decisions.

Initially such estimates of relative transaction costs are expected to be very approximate, but they will offer an improvement over the current lack of information at the critical moment when a buyer has a complete purchase order. More importantly, this will create an enormous incentive for improvements to the accuracy, as well as a means to do so. In particular, once users who are subscribed to Xalgorithms BuyMyData have completed a new payment, with their authorization some of the actual transaction cost data is securely added to the data collection to continually improved its accuracy.

Pasta Futura Trading Company:
Once it’s market-ready, Lichen could be used to structure multi-vendor sales.

Pasta Futura sells fresh pasta products that require refrigeration through numerous local shops that have signed up as distribution centres. When a retail customer orders online from Pasta Futura, after selecting their items for the e-shopping cart, they can select a pick-up location from a list of participating shops. This distribution method is good for the local shops because selling fresh pasta brings additional customers through their doors, increasing their face-to-face sales opportunities.

Pasta Futura fosters synergy instead of conflict between the on-line and brick & mortar retailers. In order to get the local shops to sign up, Pasta Futura guarantees them that whenever an online customer selects a shop for pick-up which has in-store any of the products that the customer has placed in Pasta Futura’s e-shopping cart, the items in the order that the physical store carries will be fulfilled instead by that local shop.

Since Lichen is integrated into both the online and on-site systems, Pasta Futura is notified which items it should not send with an order. And, using data from Lichen, the underlying e-commerce solution can automatically generate a combined receipt for the customer upon pick-up, distinguishing the items sold by Pasta Futura, from those sold by the local shop.

Anyhow Cacao:
Once it’s launched, Lichen could be used to guide production and to calibrate price in alignment to multiple quality factors.

Anyhow Cacao arranges exports from several dozen small-scale cacao farms directly to specialty chocolatiers in foreign markets, who appreciate the role high-quality cacao beans have in enhancing the taste of final chocolate products. Their customers order a half or a quarter container at a time, to precise specifications (e.g. specific cultivars and hybrids; given times and methods of fermentation and drying; particular packaging types and conditions; guarantees that certain chemicals have not been used; tailored delivery schedules).

This means Anyhow Cacao is selling a wide diversity of products into micro-markets. The general business arrangements are set out in a contract, but for each specific order the buyer completes a simple form through an online application. The application structures all the particular requirements into an executable rule that, through the Internet, will automatically notify parties at each step in the value chain from local farm orchard to foreign chocolatier. They are informed at each hand-off transaction of the unique requirements they must to attend to: e.g. particular trucking requirements, transit storage conditions, phytosanitary regulation compliance measures, and so on. (If a buyer requires confidentiality, the algorithm can encrypted, and, the terms of the non-disclosure agreement become part of the notifications, and each party in the value chain is permitted access only to the requirements that concern them.) These rules are published on the Internet of Rules for auttomated access throughout the entire supply chain.

All of this requires enhanced documentation, and all participants in the supply chain can use Lichen to manage end-to-end product tracking from tree to customer. Data is entered at each point by workers through their various devices, beginning with the code from the tag on each cacao tree, which is read into smartphones by workers on the plantation. Conditions are also validated with data input through each stage of each delivery, so every product unit in a given order can be reasonably guaranteed by Anyhow Cacao as meet the precise specifications.

Customers’ online purchase orders can also be integrated with Lichen. A rule can be created to compare order requirements and tolerances to actual supply chain data, and to generate a report on conformance or deviation. The algorithmic pricing formula automatically sets the unit price higher for more rigorous specifications; it invokes discounts for deviations; and it notifies the parties if any factor deviates from the negotiated tolerances.

Systemic quality control at this level of rigour enables farms participating with Anyhow Cacao to qualify for various advanced certification and optimal pricing. Since the farms can increase their per-tonne price, it becomes feasible for them to exceed minimum pay and benefits for their hired workers, to provide better on-farm accommodations for their families, to offer worker bonuses linked to outcomes, and to allocate more time and attention to ecologically sound agro-forestry management.

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