A Proposition For Obopay or MoneyExchange

If you have read some of my previous posts you may already know about my need for an escrow service to support the growing number of micro-retailers who are selling to other individuals worldwide. Fast Company did an excellent story discussing this trend among Chinese micro-retailers.

It seems to me one of the primary concerns about building such an escrow system is the overhead for customer service and also in the event of arbitration between the parties. I can see how this could get expensive to support. An ideal escrow service would need to keep a record of all the communication between the buyers and sellers and handle all the necessary automatic notifications to either party for a smooth transfer of goods and services.

So now my thinking is to handle all the customer service and partner with a service who can simply “park” the money in an escrow without having to handle the communication between sellers and buyers. This partner would provide to me the developer’s API so that I can tie the alerts and notifications to my system. These would include such information as money received, amount received, to and from accounts, etc.

One such partner I am considering is Obopay.com. They can handle the transfer of money for 10 cents a transaction. That is cheap and very attractive for global micro-retailers. The idea would be for buyers to use Obopay to send my system the purchase amount. My system would receive a notification from Obopay containing all the transaction information. My system would then alert the seller that the funds were received for this purchase so he can go ahead and fullfill the order. When the buyer receives the goods, he notifies my system. My system then uses Obopay to send the funds to the seller.

If there is any arbitration needed between the parties, my customer service would take care of that. Obopay would therefore not need to get into the business of building an entire escrow system. If any buyer needs a refund then I can use Obopay to send back the funds to the buyer. From Obopay’s viewpoint, they would not need to change their business model.

There are therefore two missing pieces for this partnership to occur. First, an API from Obopay. Second, international support. I am especially targeting the United States and China. I read some good news Obopay is expanding into India. However, to really explode this kind of service, Obopay needs to be available worldwide and provide third party sites with an API.

I truly hope Obopay can foresee the potential in catering to micro-retailers. I am building a site where micro-retailers can sell their goods. I just need the right kind of payment system that does not add so much overhead costs and works internationally (or at least the major countries). Other services I am considering are mCheck.com, CitiMobile and Revolution Money Exchange.

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