A peer-to-peer escrow
/Dan and I spotted an interesting innovation while in Jakarta. The most popular online marketplace in Indonesia is Kaskus. It evolved from a Counter-Strike forum and now facilitates a Craigslist-esque service for buying and selling all types of goods.
One challenge online businesses in Indonesia face is the high level of fraud to contend with. Fraudulent sellers & buyers appear to be relatively common, and we heard there is a high level of distrust around buying & selling online. An interesting solution has emerged organically to this among the Kaskus community – a peer to peer escrow. The way it works is:
- Within the Kaskus community there are superusers known to provide this service
- The buyer, A will decide to buy item X from seller B
- A transfers the money for the good to one of these superuser intermediaries, Y
- Intermediary Y will confirm to seller B that they have received the money
- B will ship item X to A
- On satisfied receipt of X, A will tell Y to transfer the money to B
- Transaction completed. Intermediary Y accrues additional positive reputation and takes a cut (up to 5% I heard?) of the transaction value
This seems like a interesting solution to a marketplace fraught by fraud, and it’s very interesting to see it created by the community in a fully emergent fashion. Typically most online marketplaces I have observed offset the risk of fraud as part of the marketplace’s core offering (e.g. eBay, Airbnb), but for markets where the level of fraud is high, this is another solution.
Does a similar online peer-to-peer escrow exist in any other markets?