A friend of mine had his car stolen when trying to sell it to someone he met online. He handed over the keys to the potential buyer for a test drive and the moment he turned his back to make the buyer a cup of tea, the car was gone. He never received payment for the car or managed to track down the culprit again.
While his situation was pretty shocking, what we learned was worse – peer-to-peer fraud is an unfortunately common problem. A McAfee study estimates that online fraud totals as much as $98 billion USD a year and that these figures could be much higher since 80 percent of such crimes go unreported.
Staggered by the need to better secure payments between two people who don’t know each other, I launched Shieldpay with the goal of protecting people from fraudsters like the one who swindled my friend. My plan of attack was to build a way to pay that met three goals – protect both buyers and sellers, ensure security and transparency, and be easy to use.
The result was reimagining a 200-year-old solution known as escrow – a method of securing funds from a buyer, holding them in an independent facility and only releasing them to the seller when both sides are happy. Traditional escrow is slow and expensive, but with Shieldpay you can create a digital escrow facility in less than 10 seconds and transact with anyone, anywhere total confidence.
For starters, we verify the identities of all buyers and sellers through our robust security and ID checks so we can be sure they are who they say they are. Funds are then added to the vault, where they are held securely and only released when both sides agree they’re happy with how the transaction has taken place. It’s fast, simple and secure.
In revolutionizing escrow, the feedback from our earliest participants got us thinking that instant digital escrow had legs in other verticals including classified ads, ecommerce platforms, marketplaces and multi-million-dollar merger and acquisition deals. Another key use case for Shieldpay is real estate. The opportunity to shave two weeks off the mortgage process for both businesses and consumers is one of many clear benefits for everyone involved – it’s a no brainer.
We joined Mastercard Start Path to tap into the company’s network and explore the many ways that banks, businesses and people can benefit from buying and selling with total transparency.