Definition Definition

Barter system

Definition 1

Barter is the action of direct exchange of goods and/or services for other goods and/or services without the use of money or currency and without the involvement of a third party. The system of barter is called the Barter System.

Definition 2

The means of exchange (the goods or services concerned) in a cashless deal is also termed barter and the system of that is a barter system.

Money or currency has come into use in order to make the exchange or transaction easier since determining the exact value of any good or service can be daunting and not always correct.

Types of Barter System

There are mainly four types of barter system and they are -

  1. Direct (between two people)
  2. Retail (local trade between small businesses)
  3. Corporate (faraway trade between corporate giants)
  4. Countertrade (large international trade including barter)


For example, if two businesses see profit in collaborating with each other, they agree to exchange services they lack but the other one provides. A software development firm may require a content writing agency to partner with so that they can provide complete websites to their clients. In return, the software development firm can give the content agency free software and web development services.


Use the Term in Sentences

  • One may think the barter system is an outdated practice but that cannot be further from the truth.
  • A gift-giving culture is a subtler form of the barter system that has given birth to the practice in the first place.


Category: Economics
Share it: CITE

Related Definitions