Money online

Raising money is among the most daunting of tasks. Whether it’s something small like trying to get people to pitch in for a gift for a friend or raising a sizable amount to get your business running, the mechanics of generating funds always been the most difficult.

But the good news is that with new online peer-to-peer tools, this might not be such a pipe dream anymore. These tools leverage the power of online groups. They aim to help people with similar financial interest make their own groups and do commerce within the group. Although the phenomenon is still in a very nascent stage, here are few examples.

First of the breed are sites like Fundable ( and Chiplin ( They let you pool resources with a money-back guarantee. These come in handy for putting together a kitty for gifts, parties or charities.

These sites let you arrange your friends into groups and set up tasks for them. You set up a fundable (task) action with a deadline. Say you need to raise Rs 5,000 for your favorite charity, asking 500 people to contribute Rs 50 each. If 100 people don’t contribute by the date you set, everyone gets their Rs 50 back.

Some of the current actions set up include contribution for a charity hospital, a lung replacement and a student’s apartment rent.

For credibility both these sites claim to adhere to the Paypal policy, which is eBay’s established peer-to-peer service. For money transfers, they create Paypal accounts and deposit the amount in those until the expiry period.

But there is more to these sites than just buying and funding gifts. The ideas of being able to quickly set up a group fund could make a world of difference to the business community. These sites can help you set up your own mini-mutual fund, to finance any kind of project you are doing. Say you are a musician and you need to collect funds for your new album. You could set up a project that asks about 5,000 people to agree to buy your album for about Rs 200 a copy, and then you’d go ahead and make it.

While Wallet 365 ( and Paypal ( provide peer-to-peer commerce at the individual level, zopa ( and Prosper ( are taking this concept a step ahead, and building peer-to-peer banks.

The system lets anybody build a case for why they need to borrow money. They lenders can select the cases they want to take on and can easily put a little money to work in dozens of them, diversifying their risk.

The risk of course is the defaulters, which is why these sites have a system for helping lenders make better decisions. They work on the principal of strong identification and social shame. Before you set up a project, you’d have to provide some verifiable financial information about yourself and set up your bank account to make automatic payments into your loan.

Like with any system that involved money, these too come with their set of hurdles. One big issue is fraud. With the internet already rife with identity theft and hacking, fraud can eat into group commerce too. The system with these tools will have to be extremely tamper proof for them to work on a large scale. Then of course there will have to be detailed tracking mechanism and process management tools in place to run the funds.