How Pharmaoffer builds online trust in the pharmaceutical raw materials market with OPP Escrow

Pharmaoffer brought online trust to the market for pharmaceutical raw materials with OPP. Escrow holds the buyer’s money until the goods arrive, and supplier subscriptions and Pharmaoffer’s margin are settled automatically.

Drug shortages and expensive medicines are a problem worldwide, and the market for pharmaceutical raw materials is complex and opaque. Pharmaoffer gives medicine makers direct access to qualified suppliers at fair prices. Buyers search for a material, filter to the relevant suppliers, make contact through the platform, and Pharmaoffer facilitates the order once both sides agree.

“By linking medicine makers and raw material suppliers directly, we are eliminating the middlemen who have previously held the reins. Because it is a challenge to get a traditional industry excited about online transactions, reliability is a key focus for us. First, when it comes to the trading parties and the quality of the products they provide and second, for the financial part of the transaction.”

Ammar Badwy, CEO of Pharmaoffer

The partnership: validated parties, validated payments

Pharmaoffer validates every buyer and supplier on its platform, from pharmaceutical certifications to the paperwork needed to trade in raw materials. For the financial side of each transaction, it needed a partner that validates the payments with the same rigour. That is the division of labour with OPP.

OPP and Pharmaoffer partnered to make online trading safe in a market that had always run on personal contacts. OPP Escrow holds the buyer’s money until the raw materials arrive, and supplier subscriptions and Pharmaoffer’s margin are settled automatically. The next step the two companies set out was paying suppliers in more currencies.

The challenge: a market most providers would not touch

Pharmaceutical raw materials are a regulated, high-value trade, and many payment providers will not facilitate it at all. When Pharmaoffer went looking for a payment partner, most conversations ended almost as soon as they began, because the provider’s general terms and conditions excluded the pharmaceutical industry. OPP was the exception: before saying yes or no, it wanted to understand how Pharmaoffer had made its platform reliable.

“Other providers quickly cut the conversation short by saying that the general terms and conditions do not allow them to facilitate payments for parties operating in the pharmaceutical industry. Online Payment Platform was interested to hear what we want to achieve and how we have set up our platform to ensure precisely that a reliable environment is created. Our question needed customisation and to deliver this we found in them a unique partner.”

Ammar Badwy, CEO of Pharmaoffer

Our solution: escrow between strangers, and margins settled automatically

OPP handles both the suppliers’ subscription payments and the payments between buyers and suppliers, and uses multi-split to settle Pharmaoffer’s margin on each transaction along the way. The transaction payments run on OPP Escrow: when an order is placed, the buyer’s money is held until the goods are received, and only then paid to the supplier.

“Just as we are specialised in the validation of our buyers and suppliers, Online Payment Platform is specialised in the validation of the payments. These take place according to the principle of equal crossing. This means that when an order is placed, the buyer’s money is held until the goods are received. The supplier then receives the payment. We can thus guarantee delivery to the buyer, and the supplier runs no credit risk. In addition, this makes it easier to do business with still unknown suppliers.”

Ammar Badwy, CEO of Pharmaoffer

OPP holds the licences PSD2 requires, which for Pharmaoffer confirmed the choice. The integration went smoothly, with personal support from OPP’s technical experts.

“Just like a notary, we work with an independent third party for our payments. In addition, Online Payment Platform has the right permits and licences such as PSD2. Which also confirms our confidence in them.”

Ammar Badwy, CEO of Pharmaoffer

The impact: a platform used in more than 185 countries

Medicine makers and suppliers now get a seamless payment experience, and escrow has become one of Pharmaoffer’s strongest selling points in a market where trust decides whether a deal happens. The pandemic pushed an industry used to trading at exchanges towards digital, and Pharmaoffer grew faster than anticipated; the platform is used in more than 185 countries.

“Together with Online Payment Platform, we are working on the next step to enable payouts in multiple currencies such as Indian Rupees. We can’t wait to grow further internationally with this.”

Ammar Badwy, CEO of Pharmaoffer

What this means for you: why B2B marketplaces in regulated sectors need escrow

If you run a B2B marketplace in a sector that most payment providers avoid, Pharmaoffer’s experience is worth knowing: the right partner asks how you keep your platform reliable, and builds the payment flow around it. Escrow then does for the money what your validation does for the parties.

Want to see how escrow could work for your marketplace? Get in touch to learn more.

Talk to our team

Frequently asked questions

Will a payment provider work with a marketplace in the pharmaceutical industry?

Many will not: their general terms and conditions exclude parties in the pharmaceutical industry. OPP took a different approach with Pharmaoffer. It first looked at how the platform validates its buyers, suppliers and their certifications, and then built a payment set-up around that.

How does escrow work on a B2B marketplace?

When an order is placed, the buyer’s money is held by OPP until the goods are received, and only then paid to the supplier. The buyer is guaranteed delivery, the supplier runs no credit risk, and doing business with a supplier you have not worked with before becomes easier.

Can a marketplace charge subscriptions and take a margin through the same payment provider?

Yes. On Pharmaoffer, OPP handles both the suppliers’ subscription payments and the payments between buyers and suppliers, and settles Pharmaoffer’s margin on each transaction automatically.

Why use an independent third party for payments between businesses?

Pharmaoffer compares it to working with a notary. A licensed, independent party holds the money between buyer and supplier, so neither side has to trust the other first. OPP holds the licences PSD2 requires for this.

Can suppliers outside the eurozone be paid in their own currency?

Pharmaoffer’s suppliers are spread across the world, and payouts in multiple currencies, such as Indian rupees, were the next step it set out with OPP when this story was written.

Services used

Online payments

Instant payouts

Business onboarding

Escrow

Multi Split