CROSS-REFERENCE TO RELATED APPLICATIONS
[0001] This patent application is related to and claims the benefit of priority from the Indian Provisional Patent Application with Serial No. 201711020204 titled "ESCROW SYSTEM", filed on June 08, 2017, and the contents of which are incorporated in entirety by the way of reference.
TECHNICAL FIELD
[0002] The present disclosure relates to escrow systems and methods for implementing escrow systems. Particularly, the present disclosure relates to protecting buyers and sellers from fraudulent online transactions. More particularly, the present disclosure relates to escrow systems that present themselves as a trust worthy third party intermediary for a transaction between a buyer and seller.
BACKGROUND
[0003] The popularity and ease of access of internet has brought about a phenomenal increase in the number of people using the internet to fulfill their diversified needs including shopping for products/services. With an increase in the number of users (consumers) relying on 'online shopping websites' and 'e-commerce websites' to fulfill their shopping needs, there has also been a steady increase in the number of e-commerce platforms offering products/services on the sale to the consumers.

[0004] With the increase in the number of e-commerce platforms offering products and services on sale to the users, both the users as well as the sellers (offering products/services for sale on e-commerce platforms) are exposed more so ever to the risk of fraudulent transactions. Some of the most common fraudulent acts/transactions performed by a seller offering products/services for sale on e-commerce platforms include but are not restricted to ‘delayed shipping of the requested product’, ‘shipping a product not chosen by the buyer’, ‘shipping a product other than the one displayed and offered on sale on the web portal’. Further, some of the fraudulent acts/transactions performed by a user purchasing products/services from a seller through e-commerce platforms include ‘passing off a used product as an unused product and claiming a refund’, and ‘returning a damaged product for a refund’.
[0005] To obviate the aforementioned drawbacks, third party escrow systems were introduced. Users make use of third party escrow systems to pay for the products they purchased. Third-party escrow systems act as an intermediary between the sellers and consumers. Escrow systems attempt to facilitate genuine transactions between the consumers (buyers) and sellers by receiving the payment from the consumer’s end before triggering the shipment of the corresponding goods to the consumers. However, there have been instances of third party escrow systems being fraudulent, and the buyer and the seller would discover the fraudulent intentions of the escrow services only after either of them has suffered a loss. Further, most of the
3

third-party escrow systems are owned and operated by e-commerce platforms, and hence it is surmised that such escrow systems are probably biased towards the respective e-commerce platforms and might end up assigning a relatively lower priority to the interests of the buyer. Therefore, there has been felt a need for a neutral escrow system that protects the interests of buyers and sellers alike.
[0006] Further, even with the implementation of escrow systems, there are no guarantees that a fraudulent transaction initiated from the buyer, for example, passing off a used product as an unused product and claiming a refund’ or ‘returning a damaged product for a refund, is completely circumvented. Further, most of the third-party escrow systems are centralized system designed to be used with specific websites, are dependent upon the products/services sold on the corresponding websites.
[0007] Therefore, there was felt a need for an escrow system that is configured to be implemented in such a way that the interests of both the buyers and the consumers is not compromised with. There was felt a need for an escrow system that presented a neutral outlook and was not biased towards neither the buyers nor the consumers. There was also felt a need for an escrow system that employs robust risk assessment criteria and dispute resolution criteria.
4

OBJECTS
[0008] An object of the present disclosure is to provide an escrow system that has been configured to be implemented in such a way that the interests of both the buyers and the consumers is not compromised with.
[0009] Yet another object of the present disclosure is to provide an escrow system that has been configured to be implemented independent of underlying (e-commerce) websites.
[0010] Still a further object of the present disclosure is to provide an escrow system that has been configured to mitigate the risks involved in shipment and acceptance of products/services.
[0011] One more object of the present disclosure is to provide an escrow system that has been configured to incorporate efficient risk control measures.
[0012] Yet another object of the present disclosure is to provide an escrow system that has been configured to ascertain buyer’s credibility before enabling the said buyer to perform a transaction.
[0013] Still a further object of the present disclosure is to provide an escrow system that has also been configured to ascertain the seller’s credibility before enabling the seller to offer products and services on sale.
5

[0014] Another object of the present disclosure is to provide an escrow system that enables seamless on-boarding of the buyers and the sellers, in a website-neutral manner, and provides for automatic verification of the credibility of buyers and sellers.
[0015] Yet another object of the present disclosure is to provide an escrow system that is equipped with robust risk management facilities.
[0016] Still a further object of the present disclosure is to provide an escrow system that is capable of extracting data feeds pertinent to a buyer/seller from a plurality of market place accounts, and consolidate the data feeds into a unified escrow system account.
[0017] Yet another object of the present disclosure is to provide an escrow system that is configured to adapt various principles of ‘Know Your Customer (KYC)’ to facilitate seamless on boarding of buyers and sellers.
SUMMARY
[0018] The present disclosure envisages an escrow system that protects (consumers) buyers and sellers alike in an online transaction. The present disclosure envisages an escrow system that has been configured to function as a payment intermediary between a buyer and a seller participating in an online transaction. The escrow system envisaged by the present disclosure mitigates the risks associated with online transactions (conducted between sellers and buyers located at remote
6

geographic locations, and via an e-commerce platform). In one embodiment, the escrow system functions as a trusted third party that collects and holds released funds from a buyer, and dispenses the funds to the seller only when the buyer ratifies his satisfaction about the product/service sold through the online transaction. In another embodiment, the escrow system is configured to function as a seller oriented system, preferably managed entirely by the seller – an e-commerce platform – that collects and holds released funds from the buyer until he ratifies his satisfaction about the products/services sold online by the e-commerce platform.
[0019] In accordance with the present disclosure, a buyer scans through an online e-commerce platform/portal and selects at least one product/service for purchase. In accordance with the present disclosure, the escrow system is embedded into the online e-commerce portal. Subsequently, the buyer chooses a product/service to be purchased from a specific seller amongst the listings of products/services and the sellers published on the online e-commerce portal. Subsequently, when the buyer initiates a payment in exchange for the product(s)/service(s) procured from a seller, the payment initiated by the buyer, instead of being deposited directly into the seller’s designated financial account, gets deposited into a (financial) account associated with the escrow system, and subsequently the delivery of the chosen product(s)/service(s) is arranged for. Subsequent to the buyer receiving the chosen product(s)/service(s) and ratifying his satisfaction, the escrow system releases the corresponding payment, which was held
7

escrow, to the seller’s financial account. In accordance with the present disclosure, the financial accounts associated with the buyer and the seller could be either a real account or a virtual account.
DETAILED DESCRIPTION
[0020] In order to obviate the drawbacks discussed hitherto, the present disclosure envisages an escrow system that protects buyers and sellers alike in an online transaction performed using an e-commerce platform. Preferably, the e-commerce platform presents product/service listings to the consumers, and also provides for immediate fulfillment of orders for products/services received from the consumers. The escrow system envisaged by the present disclosure has been configured to function as a payment intermediary between a buyer (consumer) and a seller (vendor) participating in an online transaction. The escrow system envisaged by the present disclosure mitigates the risks associated with online transactions (conducted between sellers and buyers located at remote geographic locations). In one embodiment, the escrow system functions as a trusted third party that collects and holds released from a buyer, and dispenses the funds to the seller only when the buyer communicates his satisfaction about the product/service sold through the online transaction and by the e-commerce platform. In another embodiment, the escrow system is configured to function as a seller oriented system, preferably managed entirely by the seller – an electronic commerce platform – that collects and
8

holds released funds from the buyer until he ratifies his satisfaction about the products/services sold online by the seller and through the ecommerce platform.
[0021] In accordance with the present disclosure, the escrow system envisaged by the present disclosure is also configured as a neutral platform that protects the interests of buyers and sellers alike. The escrow system envisaged by the present disclosure is configured to incorporate a neutral outlook towards every buyer and seller, and protect the interests of both the buyer and the seller irrespective of the underlying business model.
[0022] The present disclosure envisages a method for implementing a federated escrow system across multiple e-commerce platforms. The method, in accordance with the present disclosure includes the following steps:
embedding the escrow system onto at least one e-commerce platform (step 100);
tracking activities of at least one consumer using said at least one e-commerce platform, and tracking purchase requests made by said consumer through said e-commerce platform (step 102);
receiving the payment from the consumer through the e-commerce system, and diverting the payment into a pre-designated financial account accessible only to the escrow system (step 104);
initiating delivery of commodities corresponding to the purchase request, to the consumer, only after a confirmation of the payment being received by said financial account (step 106);
9

prompting the consumer to confirm a safe receipt of purchased commodities, and allocating a predetermined time period to the consumer, post delivery of the purchased commodities, to provide his feedback about the purchased goods/services (step 108);
triggering the pre-designated financial account accessible only to the escrow system, to release the payment to a seller of the purchased commodities, only in an event that the consumer provides a positive feedback on the purchased commodities, to the escrow system (step 110).
[0023] In accordance with the present disclosure, the financial accounts associated with the buyer and the seller could be either a real account or a virtual account.
[0024] In accordance with the present disclosure, the method further includes the steps of automatically registering a plurality of commodity vendors and a plurality of consumers onto the escrow system, and automatically verifying credentials of the vendors and the consumers of the escrow system.
[0025] In accordance with the present disclosure, the method further includes the step of collecting data feeds relevant to the vendors and the consumers, from publically available data sources, and constructing respective vendor profiles and consumer profiles based on the data feeds collected from the publicly available data sources.
10

[0026] In accordance with the present disclosure, the step of collecting data feeds relevant to the vendors and the consumers, from publically available data sources, further includes the step of determining consumers’ and vendors’ online behavior, buying/selling pattern and preferences, based on the data feeds extracted from the publically available data sources.
[0027] In accordance with the present disclosure, the method further includes the step of automatically verifying authenticity of the vendors and consumers using at least one of eKYC facility (electronic Know Your Customer) and predetermined user authentication schemes.
[0028] In accordance with the present disclosure, the method further includes the step of tracking online behavior of the consumers and vendors, and further tracking interactions of the consumers and vendors with the escrow system.
[0029] In accordance with the present disclosure, the step of tracking online behavior of the consumers and vendors, further includes the step of tracking the online behavior of the consumers and vendors across a plurality of e-commerce platforms, and importing data representative of the online behavior of the consumers and vendors, onto the escrow system.
11

[0030] In accordance with the present disclosure, the method further includes the step of using at least one tracking metric selected from the group consisting of online trading pattern of buyers and consumers, credit score information, transaction history, historical feedback, to track the online behavior of the consumers and vendors across the plurality of e-commerce platforms.
[0031] In accordance with the present disclosure, the step of tracking online behavior of the consumers and vendors, further includes the step of ranking each of the consumers and vendors based on at least one of said online trading pattern of buyers and consumers, credit score information, transaction history and historical feedback.
[0032] In accordance with the present disclosure, the step of tracking online behavior of the consumers and vendors further includes the steps of setting a transactional limit for each of the consumers and vendors for a predetermined period of time, and selectively revising the transactional limit based at least in-part on the online trading pattern of buyers and consumers, and based on the rankings of the consumers and vendors.
[0033] Explaining the method of implementing the federated escrow system across multiple e-commerce platforms in further detail, at step 100 of the method, a buyer scans through an online e-commerce portal and selects at least one product/service for purchase. In accordance with the present disclosure, the escrow
12

system is embedded into the online e-commerce portal. Subsequently, the buyer chooses a product/service to be purchased from a specific seller amongst the listings of products/services and the sellers published on the online e-commerce portal (step 102). Subsequently, when the buyer initiates a payment in exchange for the product(s)/service(s) procured from a seller, the payment initiated by the buyer, instead of being deposited directly into the seller’s designated financial account, gets deposited into a financial account associated with the escrow system envisaged by the present disclosure (step 104), and subsequently the delivery of the chosen product(s)/service(s) is arranged for (step 106). Preferably, the delivery of the chosen product(s)/service(s) is arranged for, only after receiving a confirmation from the financial account about the payment (money) corresponding to the purchases made from the seller.
[0034] Subsequently, the buyer (consumer) is prompted (via the escrow system) to confirm a safe receipt of purchased commodities (step 108). Preferably, a predetermined time period (starting from the date of purchase) is allocated to the consumer to provide his feedback about the purchased goods/services. Subsequent to the buyer receiving the chosen product(s)/service(s) and ratifying his satisfaction, the escrow system releases the corresponding payment, which was held escrow, to the seller’s financial account (step 110).
13

[0035] The escrow system envisaged by the present disclosure automatically confirms the deposit of the payment (corresponding to the online transaction) to the financial account, and subsequently advises the seller to initiate the delivery of the chosen product(s)/service(s) to the buyer. In accordance with the present disclosure, the buyer is allocated a predetermined amount of time post the delivery of the chosen product(s)/service(s) to provide a feedback confirming whether the products(s)/services(s) procured from the seller were satisfactory or otherwise. Subsequently, in the event that the buyer expresses satisfaction about the products(s)/service(s) procured from the vendor, the escrow system initiates a transfer of the corresponding payment from the financial account to a (financial) account associated with the seller.
[0036] The escrow system envisaged by the present disclosure is configured to facilitate a seamless on-boarding of the sellers as well as buyers. In accordance with the present disclosure, buyers and sellers who wish to transact using the escrow system would have to enroll themselves by the way of creating a user account (to be used to access the escrow system). Post creation of the user account, the credentials of the registered buyers and sellers are automatically authenticated by the escrow system. For instance, the escrow system automatically collects data feeds from any publicly available data sources including user accounts on various online e-commerce portals. By analyzing such data feeds, the escrow system elicits user’s purchase behavior, user preferences and the like, and constructs a user profile to be
14

associated with the buyer for any subsequent online transactions routed through the escrow system. Similarly, the escrow system extracts relevant information pertinent to sellers from various predetermined publicly available data resources, and also from the ‘seller accounts’ available across various online e-commerce portals. By analyzing the information pertinent to the sellers, the escrow system constructs respective seller profiles which are associated with corresponding sellers for any of the subsequent transactions routed through the escrow system.
[0037] In accordance with the present disclosure, the escrow system automatically verifies the authenticity of the buyer as well as the seller before on-boarding them. For instance, the escrow system adopts conventional online KYC functions including predetermined eKYC facilities, and user authentication from federal agencies/government agencies, to validate the identity of a user registered as a buyer. Subsequently, the escrow system also tracks the online behavior of the sellers as well as the buyers. Typically, the online behavior of the sellers and the buyers during interactions with the escrow system are identified and tracked. In addition, the online behavior of the registered sellers and buyers on any other online platforms are also tracked. Various tracking metrics such as credit score information, transaction history, historical feedback and the like are utilized to rate the buyers and sellers and accordingly set an optional ‘transaction limitations’ on their respective ‘escrow system accounts’ for predetermined time period. Typically, the transaction limitations are revised based on the buyer/seller online trading patterns and also in-
15

line with fluctuations in the ratings allocated to the buyers/sellers. Additionally, the sellers are also provided with an opportunity to subscribe for and acquire trade assurance subscriptions which would contribute positively to the ratings allocated to the sellers.
[0038] In accordance with the present disclosure, the escrow system is also configured to facilitate offline transactions involving a buyer purchasing products/services from a seller offline. For facilitating offline transactions, the escrow system requires the buyer to register himself and the products/services purchased offline, and subsequently provides for the offline transactions to be implemented in such a manner that the money paid by the buyer for availing products/services offline is held escrow - until the products/services are delivered to the buyer and until the buyer communicates his satisfaction about the delivered products/services – and is released to the seller’s financial account only after the buyer communicates his satisfactory intent to the escrow system.
[0039] In accordance with the present disclosure, the escrow system protects a buyer against any fraudulent transactions by tracking the shipped merchandise (shipped via a predetermined shipment service provider) and by verifying the delivery of the shipped merchandize to the buyer. Similarly, the escrow system also protects the interests of the sellers by instructing the sellers to ship the merchandize only after confirming the arrival of the corresponding funds from the buyer’s end to a predetermined financial account associated with the escrow system.
16

[0040] In accordance with the present disclosure, the escrow system is embedded with predetermined payment service provider interfaces for facilitating use of various types of payment mechanisms including but not restricted to Internet banking, credit/debit cards, e-wallets, and cheques. The escrow system envisaged by the present disclosure processes all the financial transactions routed there through in a secured manner. The escrow system envisaged by the present disclosure does not necessitate creation of a new bank account neither on the part of the buyer nor on the part of the seller. The escrow system utilizes shared payment infrastructure created in collaboration with predetermined financial service providers to facilitate financial transactions without creating any extra burden (neither procedural burden nor financial burden) on the part of the buyers and the sellers. In accordance with the present disclosure, the financial accounts allocated to the buyers and sellers having registered with the escrow system could either be a virtual account or a real account. Further, such predetermined financial service providers also introduce their respective infrastructure thereby increasing the credibility associated with the escrow system envisaged by the present disclosure.
[0041] In accordance with the present disclosure, the escrow system ships the merchandise (purchased by the buyer) through predetermined logistics partners, and also facilitates real-time merchandise tracking based on a ‘tracking ID’ associated with the shipped merchandise. Further, the escrow system mandates the shipped merchandise to be insured. In the event that the merchandise gets damaged in transit,
17

the escrow system withholds the release of the corresponding payment to the seller and maintains the payment in escrow until the buyer is provided with a viable alternative (either by the way of a refund or a replacement merchandise).
[0042] In accordance with the present disclosure, in the event of a dispute arising between a buyer and a seller, the escrow system withholds the payment corresponding to the merchandise until the dispute is resolved. Further, the payment is released to seller's financial account subsequent to receiving intimation from the buyer and seller about the dispute being resolved. Additionally, in case of an impending dispute, the 'escrow system accounts' corresponding to the buyer and the seller could be temporarily blocked from performing any transactions.
[0043] In accordance with the present disclosure, the escrow system is embedded with alert and remainder generation module that generates periodic remainders to the buyers and sellers reminding them about any impending due-dates for fulfilling predetermined commitments/obligations (for example, providing feedback for a received product). Further, the escrow system also provides for a transaction life cycle (beginning with buyer purchasing an item and ending with buyer receiving the selected item in the desired manner) to be capped at a predetermined time period.

TECHNICAL ADVANTAGES
[0044] The technical advantages envisaged by the present disclosure include the realization of an escrow system that has been configured to be implemented independent of any underlying products/services. The escrow system has been configured to be implemented independent of (e-commerce) websites, and also mitigate the risks involved in shipment and acceptance of products/services. The escrow system has been configured to incorporate efficient risk control measures. The escrow system has also been configured to ascertain buyer's credibility before enabling the buyer to perform a transaction. The escrow system also enables seamless on-boarding of the buyers and the sellers and provides for automatic verification of the credibility of buyers and sellers. The escrow system that is equipped with robust risk management facilities. Further, the escrow system is capable of extracting data feeds pertinent to a buyer/seller from a plurality of market place accounts, and consolidating the data feeds into the escrow system account. The escrow system is configured to adapt various principles of 'Know Your Customer (KYC)' to facilitate seamless on boarding of buyers and sellers.

We Claim;
1. A method for implementing a federated escrow system across multiple e-commerce platforms, said method comprising the following steps:
embedding the escrow system onto at least one e-commerce platform;
tracking activities of at least one consumer using said at least one e-commerce platform, and tracking purchase requests made by said consumer through said e-commerce platform;
receiving the payment from the consumer through the e-commerce system, and diverting the payment into a pre-designated financial account accessible only to the escrow system;
initiating delivery of commodities corresponding to the purchase request, to the consumer, only after a confirmation of the payment being received by said financial account;
prompting the consumer to confirm a safe receipt of purchased commodities, and allocating a predetermined time period to the consumer, post delivery of the purchased commodities, to provide his feedback about the purchased goods/services;
triggering the pre-designated financial account accessible only to the escrow system, to release the payment to a seller of the purchased commodities, only in an event that the consumer provides a positive feedback on the purchased commodities, to the escrow system.

2. The method as claimed in claim 1, wherein the method further includes the steps
of automatically registering a plurality of commodity vendors and a plurality of consumers onto the escrow system, and automatically verifying credentials of the vendors and the consumers of the escrow system.
3. The method as claimed in claim 2, wherein the method further includes the step of collecting data feeds relevant to the vendors and the consumers, from publically available data sources, and constructing respective vendor profiles and consumer profiles based on the data feeds collected from the publicly available data sources.
4. The method as claimed in claim 3, wherein the step of collecting data feeds relevant to the vendors and the consumers, from publically available data sources, further includes the step of determining consumers' and vendors' online behavior, buying/selling pattern and preferences, based on the data feeds extracted from the publically available data sources.
5. The method as claimed in claim 2, wherein the method further includes the step
of automatically verifying authenticity of the vendors and consumers using at least one of eKYC facility (electronic Know Your Customer) and predetermined user authentication schemes.
6. The method as claimed in claim 2, wherein the method further includes the step
of tracking online behavior of the consumers and vendors, and further tracking
interactions of the consumers and vendors with the escrow system.
7. The system as claimed in claim 6, wherein the step of tracking online behavior of
the consumers and vendors, further includes the step of tracking the online behavior of the consumers and vendors across a plurality of e-commerce platforms, and importing data representative of the online behavior of the consumers and vendors, onto the escrow system.

8. The method as claimed in claim 7, wherein the method further includes the step of using at least one tracking metric selected from the group consisting of online trading pattern of buyers and consumers, credit score information, transaction history, historical feedback, to track the online behavior of the consumers and vendors across the plurality of e-commerce platforms.
9. The method as claimed in claim 7 or 8, wherein the step of tracking online behavior of the consumers and vendors, further includes the step of ranking each of the consumers and vendors based on at least one of said online trading pattern of buyers and consumers, credit score information, transaction history and historical feedback.
10. The method as claimed in claim 9, wherein the step of tracking online behavior
of the consumers and vendors further includes the steps of setting a transactional limit for each of the consumers and vendors for a predetermined period of time, and selectively revising the transactional limit based at least in-part on the online trading pattern of buyers and consumers, and based on the rankings of the consumers and vendors.