In 2017, UAPAY was the first in Ukraine to introduce the international Escrow technology in the OLX Delivery project. What is the essence of the project? How did it affect the reputation of the service? How did we adapt the technology to the Ukrainian market?
We started working on the OLX Delivery project in 2017. OLX is the largest online classifieds platform in Ukraine and one of the top 10 websites in terms of traffic among Ukrainians. OLX is ranked first in the E-commerce & Shopping category.
OLX: secure transactions and fight against fraud
With the growth of platform traffic, there has been more frequent fraud by sellers and buyers. Over 15 years of OLX’s existence (formerly Slando), the company has developed a rule. They do their best to create a safe and comfortable environment for transactions within the platform. Trust in the service depends on this.
Thanks to the presence of large logistics companies and fintech solutions, it was possible to launch the OLX Delivery service and online payments, which were not previously available on OLX. If, for example, about seven years ago, the seller and the buyer met offline to exchange goods and money, now this is happening online. The popularity of shopping and selling between different cities was also strongly influenced. According to OLX Delivery, the average distance between the buyer and the seller can reach 300 km.
Customers needed the service as a new solution for comfortable transactions on OLX, but it also made it possible to fight fraud.
Quite often, when buying through online websites, sellers ask for an advance payment. Fraudsters also use this: they put up a non-existent product in an ad, receive money and then disappear. It is not only sellers who cheat – unscrupulous buyers ask to send the order saying they will pay in cash on delivery, and during the inspection, they replace the goods with a defective product.
To minimize such risks for users of the platform, OLX came with a new decision. In 2017 they decided to increase the security of the transaction at the stage of payment and delivery.
At the same time, they held a tender in which about ten players of the Ukrainian fintech market took part. UAPAY was able to offer the most relevant solution. That is how we began to cooperate with OLX, introducing Escrow technology in the OLX Delivery project. Nova Poshta became the logistics partner of the project.
What is an Escrow?
An Escrow is a technology in which a third party acts as the guarantor of an escrow transaction. In practice, it works like this: the buyer must receive his goods, and the seller must get his money in full. Until this happens, the intermediary’s account keeps the money as a deposit.
Escrow technology came from the real estate industry. Back in the 19th century, sellers and buyers attracted agents, most often notaries, to keep money and important documents. The technology is widely used in international trade. With the growing popularity of online transactions, there is a need to ensure their reliability. So, the first Escrow service appeared in 1999. Such global companies as eBay, GoDaddy, and Shopify already use it.
Escrow technology itself is not unique and works in many other services in the world. AliExpress, for example, uses technology to handle large shipments.
We analyzed the experience of other countries where OLX operates. It turned out that each market has its nuances, and it is not so easy to launch such a project. We looked at Kazakhstan – since the country is large, a question arose with the logistics side of the process. In Poland, the service is only in the process of being finalized. Bosnia and Herzegovina is not ready to switch to cashless payments because the service is not applicable there either.
In Ukraine, everything coincided – the popularity of OLX, cashless payment systems familiar to Ukrainians, and the presence of an experienced logistics partner – Nova Poshta.
So we managed to connect all of it and create a unique service. It works for the interests of millions of customers as well as maintains trust in the service.
OLX Delivery has become a solution that allows Ukrainians to make transactions as safe as possible. Now buyers do not have to make an advance payment and wait for a pig in a poke, and sellers sell goods to buyers interested in them.
Two million safe deliveries per year
In 2020, customers used Safe Delivery 2.7 million times, and over the entire period of the service’s existence, they made more than 11 million successful transactions. The total amount of purchases in 2020 amounted to UAH 2.5 billion. Most often, they buy electronics (33.4%), clothes / shoes / accessories (23.4%) and baby products (16%).
With the COVID pandemic and the lockdown in the spring of 2020, online shopping with OLX Shipping has increased by 24%.
According to our data, 3.7 million unique customers have already used the secure transactions service.
Consumer habits, formed during the pandemic, dictate new demands for the convenience and reliability of online shopping. Ukrainians have been cashless for a long time, the market is ready, there are all possibilities for convenient delivery – thanks to these factors we have succeeded. UAPAY pioneered a solution that develops secure online shopping in Ukraine.