As of today, eCommerce fraud is roughly a $200B problem and growing every year. No fintech companies are even attempting to provide real solutions to the amount of funds being lost, simply because the traditional financial paradigm of today makes fraud very easy to commit. Certain companies are providing insurance plans to businesses to help prevent fraud before it happens, providing software that can detect fraud sometimes, but many are asking for 1% or more of a businesses total revenue when the software they provide isn’t solving but only lessening the issue.
It has reached a point where it is normal for online businesses to incorporate fraud losses into their business models. The average eCommerce business is losing 7% of their annual revenue to this specific type of fraud. At Onessus we believe the future of online business is NOT incorporating fraud into your business models, but rather building an entirely different infrastructure from ground up and stop this issue at the core. The issue here is simply that our current financial system and fintech available are all operating within biased transactional ecosystems. Meaning that one party, buyer or seller, always has more leverage within a transaction. One example would be the PayPal/Credit Card chargeback epidemic, which is a system biased towards the buyer giving them all of the power within the transaction. Any person paying using a credit card can very easily charge a transaction back with no questions asked after they’ve received a product or service. On the other hand you have bitcoin, western union & moneygram which are all biased towards the seller. Once funds are sent via these platforms there is no refunds unless the seller agrees to do so, effectively making it easy for entities with fraudulent intentions to promise a product/service and once they receive the money just disappearing with no repercussion.
This issue inspired us at Onessus to create the idea of the economic engine, a secure distributed economy with a completely unbiased transactional ecosystem. Our approach is to create an escrow system, tied in with a well thought out reputation system and marketplace without limits. Experts in any niche can become an escrow agent, essentially an “uber for escrow”, and protect those transacting within said niche from being scammed. Simple escrow services are already being implemented by companies in industries such as digital items exchange, selling domains, jewelry, electronics, and some independent contracting. However, There are still many major flaws with the existing escrow services which we highlight in the competitive analysis portion of the economic engine whitepaper.
The only other alternative way that we see to create an unbiased transactional ecosystem, and a secure distributed economy would be to leverage AI as escrow in order to detect fraud within a transaction. However the technology for this is not available now and probably won’t be for a very long time. So for now we’ve created a model that is practical and lucrative in the world we live in today.
We believe economic engines are the future of business, and we expect and encourage other companies to begin researching this.
