The Shypp.it crowdsourced delivery service has only been around for 15 months, but they just announced the business is shutting down. The explanation is interesting: the company is based in Germany and they ran into problems with German banking law around how they were holding shyppers’ money in escrow. I really like the system of social shipping companies holding money, so I hope this won’t become a problem for other companies. The escrow system ensures that the person requesting a delivery pays up front, and that the person delivering the item doesn’t get paid until they hand over the delivery. Everyone is protected.

In their press release Shypp.it explained that complying with the banking regulation “…would be expensive and would introduce a lot of overhead for reporting and the like. Another option is to change the payment processes. This would most likely add more risk to the process, since transactions would have to happen between shypper and sender directly.”

The Shypp.it website was pretty slick, and they plan to post their code to GitHub so perhaps others considering setting up peer-to-peer delivery services will be able to benefit from the hard work already done by the Shypp.it founders.

Read more about how to make money from the extra space in your suitcase or trunk in my overview of crowdsourced delivery.