top of page

E-commerce deals accounting service

The purpose of the software solution is to modernize e-commerce using distributed ledger technology tools and an escrow account without direct integration with a financial institution.

The software solution implementation model provides for:

1. Tripartite escrow account agreement between the Account Holder, the Bank and the Beneficiary, concluded to provide the Account Holder and the Beneficiary with intermediary services in the information field to ensure that third parties conduct transactions in the field of electronic commerce (subjects of electronic commerce) upon pre-ordering goods/services with deferred payment without making an advance payment (hereinafter: the Agreement) using information and communication systems. At the same time, the funds kept in the escrow account are deferred payments under the Agreement. After the Beneficiary initiates the transaction, The Bank transfers the funds to the seller/provider of the Agreement, but only after the ownership of the goods was transferred or the service had been received by the customer under such Agreement.

2. An information platform based on distributed ledger technology, in the form of an information and communication system, acting as a base for transactions in electronic commerce. Such transactions initiated by the parties to the Agreement - verified users of the information platform, while the Account Holder and the Beneficiary provide services of an intermediate nature in the information field.

3. A specialized service (hereinafter: Service), which will record all occurring events and register them in the distributed ledger of the information platform as part of the implementation of the Agreement to ensure:

  • control of the Agreement by its parties, as well as their representatives: the Account Holder and the Beneficiary;

  • programmatic control over the fulfilment of the terms of the Agreement in terms of obtaining the grounds for the sellers/executors to receive deferred payment under the Agreements;

  • automatic provision to the Beneficiary of the grounds for his application to the Bank with an indication of the issuance of funds from the escrow account to third parties (sellers/executors - recipients of deferred payment under the Agreements).

Learn the details of the software solution implementation model At the same time, the main element of the Service is the unit of accounting for the rights of the parties to the Agreement (hereinafter: token). Among other things, it records events under the Agreement in the information platform through the transaction of a distributed ledger token. For the buyer/customer, as a party to the Agreement, this is their right to order (the right to accept the Agreement), and for the seller/provider, as the other party to the Agreement, this is their right to receive funds (the right to close the Agreement). The implementation by the seller/provider of the right to receive funds from the escrow account is triggered by the parties' fulfilment of all the conditions of such an Agreement and identified by the Service as an event of termination of the Agreement with the registration of such an event in the information platform utilizing a distributed ledger token transaction. This model implies the registration of the customer's rights to conclude an Agreement on the information platform with the assignment of a unique digital identifier through a distributed ledger token transaction. At the same time, the Agreement can be concluded on the terms of the seller/provider, established in the public offer (offer) of the seller/provider to a limited circle of persons, namely to users of the information platform. The offer of the seller/provider is located in the corresponding registry of this information platform and can be accepted by the user of the information platform (customer) only through the transaction of a distributed ledger token. Thus, by using the software, verified and identified users of the platform get the opportunity to reliably and quickly conclude transactions on the Internet with the identification of their rights under the Agreement and registration of all events under the Agreement in the information platform through the transaction of a distributed ledger token. It should be noted, that this software solution allows you to ensure the implementation of contracts of a certain type, namely, contracts for the preliminary order of goods/services with deferred payment without making an advance payment (Contract) and only between users of the information platform. Currently, this type of contract is not being used in e-commerce, primarily due to a lack of trust between the seller/provider and the customer. The proposed software solution aimed to provide a solution to such issue by delivering: •identification and technical guarantee of the subject-object structure of the Agreement; •program control of fulfilment of the terms of the Agreement; •registration of all events under the Agreement in the distributed ledger of the information platform. Therefore, the proposed approach implementation will make it possible to popularize this type of contract in the field of e-commerce, as well as to ensure the development of market infrastructure in a particular country or worldwide. We would like to emphasize that this solution does not create a new form or type of money but aims at automating the method of monitoring the fulfilment of the conditions of a particular Agreement. Thus, it is not subject to various recommendations of international organizations regarding the use of electronic or digital money. The funds kept in the escrow account are deferred payments under contracts for pre-ordering goods or services without making an advance payment. The Service is not operating the escrow account, as it does not keep records of the funds. Its functionality is aimed solely at the fulfilment of the Agreements, with its main task being keeping records of the customer's debt under the Agreement.

Connection with legal innovations

Токенизация_денежных_средств_грн_en.jpg

In general, the key advantages of a software solution for the implementation of Agreements through an escrow account are:

1. Registration and identification of users.
Simple and secure registration of users (vendors/suppliers and customers) with KYC and GDPR compliance combined with the principle of sovereign identity.

2. Escrow service. 
A specialized service that ensures programmatic control over the fulfilment of the conditions under the Agreement and provides accounting for the customer's debt as a deferred payment

3. Information platform based on distributed ledger technology. 
By utilizing distributed ledger technology, it is possible to ensure a high level of reliability, security, and transparency of transactions, as well as their immutability and irreversibility

4. Deal management. 
The software solution may provide tools for managing transactions, such as tracking the status of an order, confirming receipt of a product or service, and resolving possible disputes between a buyer and a seller.

5. Program control of fulfilment of conditions.
The Service can automatically check the fulfilment of the Agreement with the registration of all events in the distributed ledger of the information platform. For example the delivery of goods or the provision of services, the receipt by the seller/provider of a deferred payment from the escrow account, etc.
 

6. Integration with tax authorities.
The platform can provide the ability to automatically transfer information about transactions to the tax authorities, facilitate tax reporting for users, or provide automation of tax deductions and the formation of tax returns/declarations/reports.
 

7. Mobile application.
The development of a mobile application will make the Service convenient and easy to use both for customers and sellers/providers. This will simplify the transaction process by using the app instead of POS terminals and bank cards.
 

8. Tokenization. 
Tokenization of the rights to make transactions with deferred payment. Unique digital identifiers (distributed ledger tokens) allow registering the rights to make transactions and can be used to identify transactions with deferred payment, as well as transactions for the assignment of rights to make transactions with deferred payment.
 

9. Anti-corruption control.
Minimization of corruption risks through software control, application of algorithms and reduction of the influence of the human factor.
 

Benefits 

Benefits for sellers/providers and customers:

  • ​a safe way to make transactions via the Internet;

  • identification of parties in the transaction;

  • security of payment for the purchase of goods/services;

  • a convenient way to make purchases of goods and services with deferred payment;

  • accounting of all transactions using distributed ledger technology;

  • fast and convenient software integration with online stores;

  • program control of targeted use of funds;

  • use of a mobile application instead of POS terminals and bank cards;

  • fraud protection;

  • reduction of transaction and time costs;

  • processing of transactions using distributed ledger technology;

  • compliance with legislation and tax guarantees;

  • flexibility: the software solution is adaptable to different activities and legal requirements in different countries.

Benefits for the Bank:

  • increase in the number of retail and corporate clients, thus the expansion of client base and increased profits;

  • reducing the cost of servicing customers - users of the platform;

  • more profitable acquiring model;

  • additional liquidity accumulated on escrow accounts;

  • increasing competitiveness in the banking services market;

  • reduced risk of fraud: an escrow-based software solution provides an additional layer of security, which means reduced risks and losses for the Bank and its customers;

  • reputation building: the provision of escrow services can enhance a bank's reputation as a reliable and secure partner for online transactions;

  • scalability: the software solution can be extended to many escrow accounts and can be easily scaled to process a large number of transactions, which allows you to accumulate turnover and profit;

  • improving the quality of service: the software solution will allow the Bank to offer customers a simple, safe and reliable way to make transactions via Internet, and improve their trust to the Bank

bottom of page