Standard Bank has acquired a 35% equity stake in digital escrow company TradeSafe Escrow for an undisclosed amount.
Established in 2013, TradeSafe describes itself as an online escrow platform that safeguards the buyer’s funds in trust until the seller delivers to the buyer what was promised. The funds are only released to the seller, and other approved beneficiaries, once the buyer receives the goods or services in the agreed condition.
TradeSafe CEO Jethro O’Brien says: “Both TradeSafe and Standard Bank realised the necessity for a fast, secure and affordable escrow solution in the wake of the increasing volume of scams, fraud and unpaid invoice payments in South African commerce. Our fees come in at a fifth of what a reputable law firm or bank would charge in a transaction.”
According to a statement, as part of the investment, Standard Bank has appointed two non-executive directors to the TradeSafe board. Furthermore, the bank also has management oversight of TradeSafe’s escrow account and is fully involved in the process for payment instructions that TradeSafe initiates.
O’Brien adds: “The bank will provide a second release payment function. This means that with our increased governance, security and credibility, TradeSafe will now be able to target commodity and M&A transactions greater than R25 million.”
The statement notes that TradeSafe has recently overhauled its platform, adding its API [application programming interface] offering also incorporates new payment gateways such as SnapScan and Ozow. “We also employed Standard Bank’s proprietary host-to-host technology, which allows for automated payments,” says O’Brien.
Kuben Chetty, head of client solutions at Standard Bank, expressed the strong need for a digital escrow solution within SA, given the rise of digital transactions and especially as buyers and sellers seek ways to mitigate transaction fraud.
“Standard Bank is very excited with its investment in TradeSafe Escrow and this provides both parties the opportunity to explore ways to leverage each other’s capabilities to help their clients transact securely.”
Share