Bangladesh Association of Software and Information Services (BASIS) today recommended the escrow services should only be applied for the high-risk e-commerce merchants, not for the regular online platforms.

Escrow is the use of a third party, which will pass the funds from one party to another when both fulfil their contractual requirements.

The BASIS made the recommendation as the commerce ministry finalised the draft of the Digital Commerce Management Guidelines 2021, which is set to be approved tomorrow.

In the case of taking advance payment, the product must be 'ready to ship' inside the country, according to the draft.

An ecommerce platform shall not take more than 10 per cent of the product's price if the product is not delivered to the delivery aggregators within 72 hours of the payment.

However, it is possible to get the full payment in advance through the escrow service recommended by Bangladesh Bank.

"Escrow is never considered a mandatory service worldwide. It is an alternative approach for customers," the BASIS said.

"We don't think escrow should be made mandatory for fast commerce, such as ride sharing, food delivery, grocery delivery, mobile recharge, service delivery or utility, education fees, ticketing (bus, air, train, launch) or hotel booking sites."

The association recommended that any transaction above Tk 15,000 only should come under the escrow system.

About the settlement process, it said before the entire process goes into automation, merchants will be able to claim money from acquirers or aggregators only after the buyers have given their delivery confirmation.

This intermediate escrow and subsequent automated escrow will also be applied on service cards, mobile financial services and, in some cases, bank accounts.

"In the current pandemic situation, people are becoming accustomed to paying by credit/debit card and MFS and online purchases instead of cash transactions and physical purchase. The use of credit/debit cards and MFS is increasing through online purchases for the e-commerce sites."