Preventing internet fraud by creating an escrow account

According to Iran Economist, an escrow account is often used in cases where the buyer and seller do not see each other, such as online purchases and sales. Of course, it also applies to cases such as buying a property or a car, where large sums are exchanged and the parties meet each other. In this mechanism, the amounts are deposited into the third account, which is the trust account, and when the transaction is completed, the amount is transferred to the seller’s account. This method can prevent fraud.

Secure purchase with an escrow account

An escrow account is a trustworthy and trusted person in a transaction who keeps the transaction money until the obligations of the parties are fulfilled.

This process starts from the agreement stage of the transaction and continues until the buyer confirms the authenticity of the goods and services and pays the seller. in such a way that the buyer pays the money to the escrow account; After sending the desired goods and services by the seller, the buyer checks the goods and declares its authenticity and satisfaction. At the end and after fulfilling the obligations of the parties, the escrow account releases the money and transfers it to the seller’s account.

Despite the opportunities created by the growth of e-commerce, this field has faced many challenges since its inception. The most important of these challenges can be summarized in the four axes of the lack of recognition of the transaction parties towards each other, the challenge of fraud and violation, transfer, the challenge of delivery and authenticity of goods, and the challenge of security in payment services.

The escrow account is supposed to solve the mentioned challenges by building trust for the providers and receivers of services and goods in the country.

The central bank has a regulatory role

According to experts, the approval of the Digital Economy Working Group to support businesses in this field can help develop the trust account service; But we need to consider some considerations. According to experts, the most important issue is that the central bank should adhere to its regulatory duties and not appear as a trust account service provider.

In an interview with Iran Economist, Hossein Molazadeh, Secretary of the Digital Economy and Technology Development Staff of the Presidency, said: Central Bank can definitely be effective in expanding the escrow account mechanism, but this institution should carry out regulatory activities and avoid entering the field of implementing this service and providing refrain from it. The Central Bank should allow the private sector to carry out this service and continue this process as it is currently providing it.

distrust; The main problem of online shopping

He further added: Amani service has many advantages and is used in different countries. This service can solve the problem of trust between service providers and goods and their receivers. The main reason why many people have not yet turned to doing their economic activities online is the lack of trust in this platform and the other party of the transaction. In many cases, platform owners claim that buyers cancel their purchases without reasonable reasons; Therefore, the biggest problem that an escrow account can solve is the issue of trust. In this way, the discussed mechanism can help the development of online purchases.

Pointing out that the development of the escrow account service has been neglected in the country, Molazadeh added: escrow service is an important tool in the field of trust building, which has not been taken into account for unknown reasons. The challenge is with validation, many of us when we make a purchase may cancel it for various reasons, and these reasons may not be very logical. We may have received a product in accordance with the specifications on the platform and it is healthy, but for any reason we have regretted our purchase. Here, in the discussion of the trust account, anti-trust performance may arise and the provider may suffer.

He continued: Escrow account is often used in cases where the buyer and seller do not see each other, such as online purchases and sales. But it is also used in cases such as buying a property or a car, where large sums are exchanged and the parties meet each other. In this mechanism, the amounts are deposited into the third account, which is the trust account, and when the transaction is completed, the amount is transferred to the seller’s account. With this method, many frauds can be prevented.