Securing E-Commerce Payments using Decentralized Crypto Escrow

Abstract

The rapid expansion of digital commerce has brought forward new challenges in payment security and transactional trust. Buyers and sellers engaging in online platforms face persistent threats such as payment fraud, unauthorized fund diversions, delayed settlements, and an overreliance on centralized financial intermediaries. Traditional mechanisms, which route payments through banks and payment gateway providers, often introduce additional costs while creating points of vulnerability that undermine consumer confidence. This paper proposes a blockchain-driven decentralized crypto escrow payment framework designed to address these shortcomings in a fundamental way. Rather than routing buyer payments directly to merchant accounts, the system temporarily secures those funds within a smart contract-governed escrow until all agreed-upon transaction conditions have been satisfied — including verified order fulfilment and successful product delivery. In the event of a dispute or transaction failure, the system enforces pre-coded refund protocols without requiring manual intervention. The proposed framework is expected to strengthen the relationship between buyers and sellers, meaningfully raise the bar for payment security, and deliver a transparent, auditable transaction environment through the principles of decentralized finance.