For my thesis I wanted to know if and how I could build a sustainabile escrow-service (PacketSwap). Research has been done using literature, surveys and interviews, in order to gain a deeper understanding of the success factors of starting this financial escrow service.
There are several legal requirements for such an escrow service: there should be a valid permit from De Nederlandsche Bank, a foundation has to be established for third-party funds, and there has to be an irrefutable purchase agreement. Indicating a final inspection date might help to prevent sellers from waiting (too) long for the buyer’s approval. To be able to resolve situations when fraud occurs there should be a dispute resolution stated in the terms of service.
Field research has made clear that the escrow service should be integrated into a marketplace. It also shows that consumers might not search for escrow services themselves, but do appreciate the opportunity to pay and buy safely online. An escrow service integrated in a marketplace has the potential to cater for this preference.
The revenue model might best be based on a payment per transaction model, such as allowing PacketSwap to ask a percentage of every sold product. Demanding both parties to pay for the transaction can further strengthen this revenue model. By asking a percentage with a minimum transaction fee PacketSwap can be profitable even for low-cost products, while still being affordable for expensive products.
One of the other success factors is user trust, which contains the following elements: availability, security, usability, privacy and reliability. MGMco can have a positive influence on all five elements when starting PacketSwap.
This is the project I will be working on in the coming months.