Standard Bank has launched a digitised Escrow solution in South Africa designed to protect individuals from risks associated with the purchase or sale of goods or services from unknown individuals
The banks said traditional Escrow accounts were designed to provide an additional layer of security to buyers and sellers involved in a direct transaction such as a car, luxury items, home renovations, and more.
Escrow allows a third party, Standard Bank in this case, to collect the buyer’s money, which is then held in a bank-managed account until all the specified requirements and conditions agreed between the two parties are met.
With the rise of the sharing economy, where people are increasingly buying goods or rendering services from each other instead of shops or businesses, the need for safeguarding against risks such as potential fraud is increasing.
This applies in particular to transactions taking place in any online marketplace or social media platform, especially given the change in consumer buying habits spurred on by COVID-19.
Kuben Chetty, head of client solutions at Standard Bank, said, “As it is ultimately a transaction between strangers, the process can expose buyers and sellers to fraud without any recourse.
“This is where Escrow becomes valuable - it can be applied to both online and offline purchases and brings peace of mind to both parties by ensuring the transaction is safe and secure.”
Prompted by the need to improve payment security in the offline and online environment, Standard Bank is leveraging its investment in TradeSafe, a FinTech with a digital escrow platform to provide greater security for individuals in an online environment that is non-face-to-face.
“Standard Bank’s Escrow solution was developed with clients' safety in mind, and the current introductory version will continue to evolve as clients provide us with their valuable feedback. We must do all that we can to ensure consumers remain secure when they are transacting,” concluded Chetty.
