The problem ProofPay solves

For an SME, trading with a new business partner should not require a leap of faith. Yet every B2B order creates a trust deadlock: if the buyer pays first, they risk receiving late, damaged, or nonexistent goods; if the supplier purchases materials and ships first, they risk delayed or missing payment. A bank transfer can move money, but it cannot enforce what must happen before that money is released. When agreements and evidence are also scattered across emails, messages, invoices, and payment receipts, any disagreement becomes slow, costly, and difficult to verify.

PayProof replaces blind trust with transparent, programmable trade conditions. The buyer creates a structured purchase order, the supplier confirms the terms, and the agreed payment is secured through a Sui smart contract. Both parties can verify that the funds exist and understand exactly when they will be released. Flexible milestone payments can provide the supplier with an agreed advance for raw-material costs, followed by further releases after shipment and successful delivery.

Shipment records and document hashes can be anchored on-chain without exposing sensitive commercial information. After delivery, the buyer can accept the goods or dispute only the affected amount, allowing the undisputed payment to reach the supplier promptly. Built-in deadlines prevent either party from indefinitely delaying shipment, inspection, or settlement.

If a dispute occurs, PayProof analyzes the submitted evidence alongside curated Malaysian legal sources to generate a cited, non-binding mediation proposal. The AI cannot control the funds or impose a decision; both parties retain final approval. Once an agreement is reached, the Sui smart contract executes the settlement and produces a privacy-preserving receipt that can be independently verified on-chain.

PayProof gives SMEs something an ordinary bank transfer cannot: a payment that follows the evidence, milestones, and agreement. By turning promises into verifiable actions, PayProof reduces counterparty risk, makes disputes fairer, and gives unfamiliar businesses the confidence to trade with one another.

Challenges we ran into

Balancing buyer protection with supplier cash flow

One of our biggest challenges was balancing buyer protection with the supplier’s need for working capital.

Our original escrow model locked 100% of the order value until delivery and inspection. While this protected the buyer, feedback from a Sui mentor revealed an important adoption barrier: many SME suppliers need funds upfront to purchase raw materials, pay workers, and arrange shipment. If they could not access any payment until final delivery, they might not be able—or willing—to use the platform.

We redesigned PayProof around a flexible three-stage milestone payment plan. Before the order is funded, both parties agree on the percentages to be released as:

• An order deposit when the confirmed order is funded
• A dispatch payment when the supplier records shipment with anchored evidence
• A final balance after delivery acceptance, inspection timeout, or dispute settlement

We implemented this flow across the user interface, backend, and Sui Move smart contract. The contract verifies that all milestone allocations equal the exact order value, records every release on-chain, and prevents overpayment. The interface also clearly shows how much has been released and how much remains protected in escrow. If a dispute occurs, only the disputed balance remains locked, while the undisputed amount is released to the supplier.

This challenge taught us that effective escrow is not simply about locking funds. It must protect buyers while also reflecting the real cash-flow needs of suppliers.