"Bitrated’s solution to consumer protection is in some ways an old one: escrow. Rather than a customer sending a payment to a merchant directly, the customer sends the payment into escrow, and the funds are released from escrow only when the customer confirms that they received the product or service. However, Bitrated makes one major addition to the model: multisignature transactions. Rather than the customer sending money directly to a trusted escrow agent, the customer sends the money to what is called a “2-of-3 multisignature address” constructed using the customer, merchant and escrow agent’s public keys. The mechanics behind a 2-of-3 address are exactly what one might guess from the name: funds sent to this address can only be spent with the cooperation of any two of the three parties.
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What are the advantages of this multisignature escrow process? There are three main factors to consider. First, in all cases where there is no dispute Trent is not involved at all. As a result, nearly all transactions will have no fee. If Trent gets involved, he will likely charge a fee, but the fact that fees are charged only when the escrow agent is actually brought in ensures that the system is paid for primarily by the very same people who make the heaviest use of it – a drastic change from the credit card system, where the fallout from fraud is evenly spread across everyone in the form of a 2.9% fee charged to every merchant and ultimately passed on to every consumer, regardless of how much due diligence each individual consumer does to deal with reputable merchants. Second, even if Alice and Bob bitterly disagree over whether or not Bob adequately fulfilled the conditions to receive the payment, if they both agree that Trent is doing a bad job of adjudicating, or is charging excessive fees, the two can sign a transaction together to send the funds directly into another escrow with another escrow agent. Finally, Trent himself has no opportunity to run away with the funds. In theory, Trent can conspire with Alice to split the funds fifty-fifty and leave Bob with nothing, but such a situation would require two of the three parties involved to be dishonest, rather than only one."
https://bitcoinmagazine.com/articles/bitrated-you-can-no-longer-say-bitcoin-has-no-consumer-protection-1386696848
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What are the advantages of this multisignature escrow process? There are three main factors to consider. First, in all cases where there is no dispute Trent is not involved at all. As a result, nearly all transactions will have no fee. If Trent gets involved, he will likely charge a fee, but the fact that fees are charged only when the escrow agent is actually brought in ensures that the system is paid for primarily by the very same people who make the heaviest use of it – a drastic change from the credit card system, where the fallout from fraud is evenly spread across everyone in the form of a 2.9% fee charged to every merchant and ultimately passed on to every consumer, regardless of how much due diligence each individual consumer does to deal with reputable merchants. Second, even if Alice and Bob bitterly disagree over whether or not Bob adequately fulfilled the conditions to receive the payment, if they both agree that Trent is doing a bad job of adjudicating, or is charging excessive fees, the two can sign a transaction together to send the funds directly into another escrow with another escrow agent. Finally, Trent himself has no opportunity to run away with the funds. In theory, Trent can conspire with Alice to split the funds fifty-fifty and leave Bob with nothing, but such a situation would require two of the three parties involved to be dishonest, rather than only one."
https://bitcoinmagazine.com/articles/bitrated-you-can-no-longer-say-bitcoin-has-no-consumer-protection-1386696848