Over the past three decades, online dispute resolution (ODR) has become a crucial tool for building trust on – and with – private e-commerce platforms. In the 1990s, eBay launched the first widely acknowledged ODR platform for its users. Since then, ODR mechanisms – operated by large payment and e-commerce platform providers for their ecosystems – have grown in sophistication and scale, commensurate with their user bases.
While today, the implementation of ODR as part of private e-commerce platforms is relatively mature, there is not the same maturity level within the public sector. As such, we set out to explore the opportunities and considerations around how ODR could be harnessed for public value, specifically looking at how ODR could be integrated into the design of good digital public infrastructure (DPI).
This expert comment is the third of a three-part series on DPI and ODR. In our first piece, we argued that DPI needs ODR to build trust, and equally, that ODR needs a DPI approach to replicate and scale. In our second expert comment, we took a closer look at emerging ODR models in India’s public sector and the learnings that other countries could take forward. And, in this final publication in the series, we build on the insights from our consultative research and share our recommendations for how actors within the DPI ecosystem could overcome barriers and adopt ODR.
Integrating ODR within DPI requires effective collaboration across a diverse range of actors, from governments to private sector organizations and regulatory bodies.
Our research has identified three key challenges that must be addressed for stakeholders to integrate ODR as a key part of an effective DPI approach.
- Finding public data on the performance of ODR mechanisms within large scale digital platforms is difficult – there appears to be little information available. This acts as a barrier to understanding and building trust for ODR models.
- There are very few guidance documents or case studies for governments and other operators to design and implement effective ODR solutions. This leads to a lack of clarity and an inability to learn and benefit from the experiences of others.
- Designing ODR solutions without a DPI approach and proper enforcement structures will result in fragmented systems, limited scalability, and a lack of authority, undermining the legitimacy of the mechanism.
To better understand – and tackle – these challenges, we outline critical recommendations that will help governments and other public sector institutions scale ODR systems within DPI, which is critical as a safeguard and a means of building trust with users. These recommendations can also aid funding and planning efforts around safeguards by funders and multilaterals.
Recommendation 1: For ODR to become widely trusted within the DPI ecosystem, governments should promote publicly accessible, standardized, and relevant dispute resolution information.
Publicly operated ODR models are generally newer. India’s digital payment system – Unified Payments Interface (UPI) – processed over 55 billion transactions in the first half of 2024 and constitutes over 80% of all digital payments within the country. However, alongside the meteoric rise of digital payments in India, there has been a surge in fraud. As a result, UPI put in place an ODR mechanism – Unified Dispute and Issue Resolution (UDIR) – which processes resulting disputes. But, none of the data is publicly available. Given the scale of UPI, there is a lot that the ODR community, as well as those working in the wider DPI ecosystem, could learn from the cases and nature of dispute handling.
Other examples of ODR include the EU’s platform, launched in 2016, which facilitates mediation or arbitration related to online purchases in the EU and addresses approximately 25,000 complaints per year. They have made some public data available, but it is not easily discoverable or usable.
Conversely, India’s financial securities regulator – SmartODR – has a dashboard that publishes rich dispute resolution data and is helpful to understand its effectiveness. Brazil’s Consumidor.gov.br platform, launched in 2014, allows consumers to log complaints against participating companies who then have defined time windows in which to respond or settle. They have open public data for most of their participating companies.
While in general, the data generated through the use of ODR may be sensitive, the public nature and value of DPI systems necessitates that such indicators should be regularly made public to increase accountability and ensure effective resolution. Currently, it is not possible to compare ODR performance across different countries’ approaches to DPI. For example, Brazil’s payment system – PIX – introduced a special refund mechanism that was implemented to address cases of fraud. However, in 2023, only 9% of claimed amounts were reimbursed. To understand whether that number is low or high for a peer-to-peer instant payment system is only possible with credible comparable data. This is important, both to test the robustness of ODR systems and to highlight evidence for advocating better ODR practices as part of a DPI approach.
How can we solve this?
A common framework for ODR taxonomy and related standards is required to bring together already available ODR data into a discoverable format. Agami’s ODR handbook and PULSE protocol (referenced further below) are great places to start as they outline some of the core concepts, terminologies, and components of effective ODR mechanisms.
Such a framework could provide a pathway for ODR mechanisms as part of a DPI approach to share data about incidences and nature of disputes. Publicly shared data like this would go a long way in promoting transparency and accountability, helping to ensure ODR systems function as intended. And just as importantly, robust data can act as a proxy indicator of consumer protection – and trust – within DPI.
Recommendation 2: To ensure governments and other operators have the knowledge and capacity to implement effective ODR systems, we need to create a comprehensive toolkit.
In practice, most countries’ use of dispute resolution as part of their DPI approach amounts to the existence of a grievance policy and/or the possibility of a user helpline. In many cases, dispute resolution processes are not integrated with issue management or grievance redress systems. ODR mechanisms are often set up without the supporting systems and processes that would allow for efficient resolution at scale, along with ensuring accountability and transparency to the user. This in turn creates fragmented and siloed systems and processes. One possible reason for this is a lack of readily available documentation detailing global ODR models and capabilities.
In the absence of knowledge around open source solutions, a public institution or innovator looking to leverage such technical resources often ends up building ODR systems from scratch, compounding the issue of fragmentation and silos.
Additionally, the sustainability of any ODR solution is a critical factor to its success, yet there remains limited knowledge or case studies covering effective ODR business models.
How can we solve this?
An example that could serve as a learning model for ODR is PULSE (Protocol for Unified Legal Services) built on the Beckn protocol. PULSE works as a universal open language that facilitates seamless communication between platforms and legal service providers, essentially democratizing legal services by making it easy and relatively cheap for claimants to access accredited neutral legal services provided by Online Dispute Institutes. By providing a mechanism to discover ODR services, the protocol demonstrates an effective business model for allowing governments and other operators to integrate ODR as part of their service offerings.
Additionally, there are a few other examples of ODR solutions solving disputes and grievances at scale in India, such as Securities and Exchange Board of India’s (SEBI) SmartODR and Unified Payments Interface’s Unified Dispute and Issue Resolution (UDIR), which have demonstrated both effectiveness and sustainability.
Drawing from these examples – and others – could form the basis of a much-needed ODR toolkit, which could be co-created for different stakeholders looking to design, build, and / or deploy ODR systems within DPI. Such a central compendium would go a long way towards helping build an evidence base covering differing ODR models – both operating and financial – and their corresponding impact.
Such a toolkit could include:
- A diagnostic toolkit – to gauge the readiness and any binding constraints that exist within the context of a given countries’ DPI and inform the design of the needed ODR mechanism.
- A detailed playbook – to understand how to design ODR systems, which could build on the diagnostic data and help stakeholders – like governments and operators – make thoughtful choices that are rooted in the relevant context and needs. Ideally, the playbook would outline the technology, governance, institutional, and sustainability choices, along with archetype example implementation of each category. It could also offer a maturity scale for ODR, highlighting everything from the bare minimum capabilities required, to more nuanced needs. The ODR Handbook by Agami is a good resource and could be leveraged to build out this body of work.
- An indicative map – to explore different use cases and their respective level of difficulty, which would help relevant stakeholders understand how to prioritize requirements alongside their country DPI roadmaps.
Recommendation 3: Regardless of how well ODR systems are designed, operators must leverage DPGs, along with relevant regulatory and enforcement mechanisms, to ensure scalability and address emergent issues like online fraud and scams.
A DPI approach seeks to minimize costs while ensuring sustainability. To implement effective ODR, this will involve leveraging relevant DPGs and open source building blocks in an interoperable manner to automate the process as much as possible. For these DPGs and open source building blocks to handle scale, there needs to be active thinking around developing rule-based criteria to handle appropriate ODR use cases, with human involvement needed only for more complex cases that cannot be resolved through automation. Ideally, incentives to encourage resolution would be designed into the systems, reserving human intervention (mediation or arbitration) for situations where the dispute cannot be resolved through automated rules.
At present, there is also no clear understanding, guidance, or case studies on how to leverage digital public goods (DPGs) or open source building blocks to design scalable ODR systems. Currently, there are only a few relevant open source, full-stack DPGs – Digit Health GRM and the Grievance Redress System (GRS) – that are easily discoverable and listed on the DPGA registry. Open source solutions like these can be leveraged to set up ODR systems within DPI. There are also a host of open source digital building blocks, such as eKYC and eSign, that are not leveraged by current ODR providers. In turn, this runs the risk of siloed systems and requiring bilateral arrangements for data sharing and interoperability. Providing a curated collection of open source building blocks that promote interoperability and scalability in ODR will help the DPI ecosystem.
However, even with a DPI approach applied to building and automating ODR systems, it will not be sufficient on its own. Automated decision-making processes still require oversight and accountability to ensure fairness. Any rule-based criteria must evolve over time to consider emerging risks as well as varying user circumstances. The oversight mechanisms within DPI that we examined, although present, were poorly defined and lacked the strength to deliver on what they promised. Even with these policies in place, people often still lack any real form of redressal. To solve this problem, it is crucial to design strong enforcement structures around policy frameworks, which provide governments the means to effectively apprehend malicious actors. This will help establish safeguards against potential ODR inaction or misuse.
How can we solve this?
Learn from others’ success. As one of the world’s first 24/7 instant payment schemes, Faster Payments UK provides a glimpse into the challenges that are likely to emerge at scale and offers valuable lessons on how to address them, particularly through the actions of the UK Payment Systems Regulator (PSR). In October 2024, the PSR introduced new enforcement rules that gave greater consumer recourse for victims of authorized but unintended payment scams, which had become a plague with the rise of authorized push payments. The enforcement approach taken by the PSR to the growing incidence of scams and fraud was multifaceted.
- Before acting, the PSR collected extensive data to understand the dimensions of the problem and consulted widely, deeming it a critical issue threatening the health of an important public-private ecosystem.
- It introduced clear rules for the arbitration of claims, which included extra consideration of the issues faced by vulnerable groups of consumers.
- Its approach included the requirement that infrastructure operators enable payers to check name and account details, which reduces misdirected payments.
- It relies on improving scam prevention through ongoing data sharing among participating firms i.e. continue to look for root causes while addressing the problems that have manifested.
- It continues to publish regular industry data, which enables the trends and extent of the problem to be tracked on a consistent basis (linking up to point 1).
These actions highlight PSR’s holistic fraud mitigation response, which was bolstered by effective regulation and enforcement structures. Such measures are essential to both track the extent of issues arising and to maintain consumer confidence that there is recourse when problems arise.
A community of practice centered on exchanging learnings around building effective enforcement mechanisms and sharing relevant experiences like those of PSR could help improve practices.
Curate guidance for effective ODR design. The DPI community needs to align on a set of standards that will guide the discovery and creation of building blocks and specifications for designing ODR. These efforts will help make ODR systems interoperable with DPI stacks, leading to better adoption. For instance, leveraging authentication and credentialing building blocks will enable immutability in transactions, which can serve as a safeguard before a dispute arises.
A useful starting point could be a compendium on relevant DPI building blocks and their use cases for ODR, along with examples of corresponding enforcement mechanisms. This would provide a curated reference that stakeholders building their DPI could leverage.
Building a strong body of knowledge around ODR, along with other critical steps, is the key to its adoption and effectiveness.
As a safeguard, ODR is crucial to protecting consumer interest. Making existing ODR data public will help create trust and enable innovations that will benefit the DPI ecosystem. In turn, this will enable an “ODR in DPI roadmap” that could be used as a design guide for seamless user-centric implementation of ODR solutions. Leveraging existing DPI capabilities will also enhance the quality of ODR deployments.
In our first expert comment, we postulated that DPI requires ODR for effective grievance redressal at scale, and ODR requires a DPI approach to become embedded effectively. These recommendations highlight ways to enhance the mutuality between ODR and DPI to build trust in effective large-scale digital systems.
