Starter Kit. Idea 452 of 500. Cluster 24
Escrow services for transactions between strangers, so that the money moves when the goods do
The mechanism, from the book
The one thing. A country where people do not expect the rules to hold cannot build anything else, and proof can be manufactured by private people, one published record at a time.
The first step
Find two strangers about to trade: a Sri Lankan buyer abroad ordering furniture from a workshop at home, or a farmer selling to a trader in another district. Offer to hold the payment in a separate account under a written agreement both sign, and release it when the buyer confirms delivery, for a small fee. The proof is one completed deal where both sides say they would use it again.
- Who pays first
- A Sri Lankan buyer abroad paying a workshop at home for goods they cannot inspect, who pays a fee so the money moves only when the goods do.
- What leaves today
- Trade between strangers does not happen when nobody trusts the payment; escrow manufactures that trust and lets the sale go ahead on the island.
Ask first
- Department of the Registrar of Companies. Ask how to register a business that holds customers' money until goods arrive.
- Inland Revenue Department. Ask how money held for other people should be recorded and taxed.
Check before you spend
Confirm whether holding other people's money for a fee needs a licence or a bank's involvement, a separate account, and a written agreement signed by both sides.
Find out these three numbers
- What do buyers abroad lose now when a deal goes wrong?
- What fee would both sides pay to make the trade safe?
- How many trades a month would the first workshop send you?
A comparison from the book
Venice. Chapter Eleven
"a way for strangers to settle up without carrying gold"
Venice grew rich partly because strangers could trust the money. That is the whole service.
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.