In 2017, UAPAY was the first in Ukraine to introduce the international Escrow technology in the OLX Delivery project. I will tell you what the essence of the project is, how it influenced the reputation of the service, as well as how the technology was adapted to the Ukrainian market.
What is Escrow?
Escrow is a technology in which a third party acts as the guarantor of an escrow transaction. In practice, it works like this: the buyer must receive his goods, and the seller must be paid in full. Until this happens, the money, like a deposit, is kept in the intermediary's account.
Escrow technology came from the real estate industry. Back in the 19th century, sellers and buyers attracted proxies, most often notaries, to keep money and important documents. The technology is widely used in international trade. With the growing popularity of online transactions, there is a need to ensure their reliability. So, the first Escrow service appeared in 1999. Now it is already used by such global companies as eBay, GoDaddy, Shopify.
Escrow technology itself is not unique and works in many other services in the world. AliExpress, for example, uses technology to handle large shipments.
We analyzed the experience of other countries where OLX operates. It turned out that each market has its own nuances, and it is not so easy to launch such a project. We looked at Kazakhstan - since the country is large, a question arose with the logistics side of the process. In Poland, the service is only in the process of being finalized. Bosnia and Herzegovina is not ready to switch to cashless, therefore the service is not relevant there either.
In Ukraine, everything coincided - the popularity of OLX, the cashless payment systems familiar to Ukrainians, the presence of an experienced logistics partner - Nova Poshta. So we managed to connect all the points in one - to create a service that works for the interests of millions of customers and maintains trust in the service.
Escrow is a solution that allowed Ukrainians to conclude transactions as safely as possible. Now buyers do not have to make an advance payment and wait for a "pig in a poke", and sellers sell goods to those who are definitely interested in them.
Relevance: secure transactions in the fight against fraud
With the growth of platform traffic, fraud by sellers and buyers has become more frequent. Over the 15 years of OLX (formerly Slando) existence, the company has developed a rule for itself - to create a safe and comfortable environment for transactions within the platform. Trust in the service depends on it.
If, for example, about 7 years ago, the seller and the buyer met offline to exchange goods and money, now all this is happening online. The popularity of shopping and selling between different cities was also strongly influenced. According to OLX Delivery, the average distance between buyer and seller can be up to 300 km.
The service was needed as a new solution for transactions on OLX, but it also helped fight fraud. Quite often, when buying through online sites, sellers ask for an advance payment. Scammers also use this: they put up a non-existent product in an ad, receive money and then disappear. It is not only sellers who cheat - unscrupulous buyers ask to send the order by cash on delivery, and during inspection they replace the goods with a defective product.
Another scheme, but already associated with telephone fraud, is when on the website buyers ask for a card number to send money for goods, and then they call, allegedly from a bank, and specify the expiration date and balance on the card, CVV, a verification word or code. Thus, money is lured out, referring to a technical failure or control of the bank's security.
In order to minimize such risks for users of the platform, in 2017 OLX decided to increase the security of the transaction at the stage of payment and delivery.
At the same time, a tender was held, in which about 10 players of the fintech market took part. This is how we began to cooperate with OLX, introducing Escrow technology in the OLX Delivery project. Novaya Pochta became the logistics partner of the project.
With the arrival of the COVID pandemic and the lockdown in the spring of 2020, online shopping with OLX Shipping has increased by 24%. According to our data, 3.7 million unique people have already used the secure transactions service.
Consumer habits, formed during the pandemic, dictate new demands for the convenience and reliability of online shopping. Ukrainians have been cashless for a long time, the market is ready, there are all the possibilities for convenient delivery - thanks to these factors we have succeeded. We at UAPAY have pioneered a solution that develops secure online shopping in Ukraine.
I am sure that such successful cases are possible when the efforts and interests of large partners are combined - and their contribution to digital solutions. Now the task of all market players is to jointly ensure the reliability of new services, so we will continue to work on infrastructure development.
What is Escrow?
Escrow is a technology in which a third party acts as the guarantor of an escrow transaction. In practice, it works like this: the buyer must receive his goods, and the seller must be paid in full. Until this happens, the money, like a deposit, is kept in the intermediary's account.
Escrow technology came from the real estate industry. Back in the 19th century, sellers and buyers attracted proxies, most often notaries, to keep money and important documents. The technology is widely used in international trade. With the growing popularity of online transactions, there is a need to ensure their reliability. So, the first Escrow service appeared in 1999. Now it is already used by such global companies as eBay, GoDaddy, Shopify.
Escrow technology itself is not unique and works in many other services in the world. AliExpress, for example, uses technology to handle large shipments.
We analyzed the experience of other countries where OLX operates. It turned out that each market has its own nuances, and it is not so easy to launch such a project. We looked at Kazakhstan - since the country is large, a question arose with the logistics side of the process. In Poland, the service is only in the process of being finalized. Bosnia and Herzegovina is not ready to switch to cashless, therefore the service is not relevant there either.
In Ukraine, everything coincided - the popularity of OLX, the cashless payment systems familiar to Ukrainians, the presence of an experienced logistics partner - Nova Poshta. So we managed to connect all the points in one - to create a service that works for the interests of millions of customers and maintains trust in the service.
Escrow is a solution that allowed Ukrainians to conclude transactions as safely as possible. Now buyers do not have to make an advance payment and wait for a "pig in a poke", and sellers sell goods to those who are definitely interested in them.
Relevance: secure transactions in the fight against fraud
With the growth of platform traffic, fraud by sellers and buyers has become more frequent. Over the 15 years of OLX (formerly Slando) existence, the company has developed a rule for itself - to create a safe and comfortable environment for transactions within the platform. Trust in the service depends on it.
If, for example, about 7 years ago, the seller and the buyer met offline to exchange goods and money, now all this is happening online. The popularity of shopping and selling between different cities was also strongly influenced. According to OLX Delivery, the average distance between buyer and seller can be up to 300 km.
The service was needed as a new solution for transactions on OLX, but it also helped fight fraud. Quite often, when buying through online sites, sellers ask for an advance payment. Scammers also use this: they put up a non-existent product in an ad, receive money and then disappear. It is not only sellers who cheat - unscrupulous buyers ask to send the order by cash on delivery, and during inspection they replace the goods with a defective product.
Another scheme, but already associated with telephone fraud, is when on the website buyers ask for a card number to send money for goods, and then they call, allegedly from a bank, and specify the expiration date and balance on the card, CVV, a verification word or code. Thus, money is lured out, referring to a technical failure or control of the bank's security.
In order to minimize such risks for users of the platform, in 2017 OLX decided to increase the security of the transaction at the stage of payment and delivery.
At the same time, a tender was held, in which about 10 players of the fintech market took part. This is how we began to cooperate with OLX, introducing Escrow technology in the OLX Delivery project. Novaya Pochta became the logistics partner of the project.
With the arrival of the COVID pandemic and the lockdown in the spring of 2020, online shopping with OLX Shipping has increased by 24%. According to our data, 3.7 million unique people have already used the secure transactions service.
Consumer habits, formed during the pandemic, dictate new demands for the convenience and reliability of online shopping. Ukrainians have been cashless for a long time, the market is ready, there are all the possibilities for convenient delivery - thanks to these factors we have succeeded. We at UAPAY have pioneered a solution that develops secure online shopping in Ukraine.
I am sure that such successful cases are possible when the efforts and interests of large partners are combined - and their contribution to digital solutions. Now the task of all market players is to jointly ensure the reliability of new services, so we will continue to work on infrastructure development.
