Starter Kit. Idea 243 of 500. Cluster 12
Gem and jewellery insurance and escrow services, so that a buyer abroad can pay safely
The mechanism, from the book
The sapphire is mined here and cut here, and its value is certified in Basel and turned into money in Geneva. Every step of that chain can be built at home, and the first one is the piece of paper.
The first step
Put one question to 10 dealers in Colombo: how often does an overseas buyer back out because of payment risk. Then ask 5 buyers abroad what would make them pay for a stone they have not held. Write down the fee each side would accept for a service that holds the money until the stone and its report arrive. The proof is a fee both sides accept.
- Who pays first
- A dealer who loses sales to overseas buyers who will not wire money for a stone they have never seen.
- What leaves today
- Buyers abroad will only pay safely through foreign dealers and platforms, so the island's stones sell through intermediaries who take the trust margin.
Ask first
- National Gem and Jewellery Authority. Ask whether an escrow service for gem buyers needs their licence or approval.
- Department of the Registrar of Companies. Ask which company form suits a business holding buyers' money in trust.
Check before you spend
Whether holding a buyer's money until delivery needs a financial licence, and what insurance covers stones lost or stolen in transit.
Find out these three numbers
- How often does a buyer abroad back out over payment risk?
- What fee would a buyer pay for escrow on one stone?
- What does insuring a stone in transit cost?
A comparison from the book
Venice. Chapter Eleven
"a way for strangers to settle up without carrying gold"
Trade grows when strangers can pay each other safely, so the safety itself is worth selling.
The test
Does it keep value that now leaves the island, or build the proof that lets somebody else do so?
From the appendix of Why Not Sri Lanka? by Dr Maheshika Halbeisen. The idea and the mechanism are the book's; this kit was written for the site.