Banking mogul Standard Bank has acquired a 35% stake in South African digital Escrow services provider in South Africa to provide an added layer of security from transaction fraud to buyers and sellers.
TradeSafe plays a vital part in protecting the buyer’s funds in a transaction involving two or more parties. It is also the longest-running escrow service in SA, and the first one to provide an interface (API) to online marketplaces and stores to offer escrow payments to customers.
TradeSafe’s escrow platform holds funds from sellers until the buyer receives the goods or services in the agreed condition.
This also marks Standard Bank’s third fintech investment in South Africa, the first two being Normanini in August 2019 and Payment24 in April 2020.
TradeSafe Escrow service received funding from Standard Bank – an undisclosed amount – in return for 35% stake in the company. Standard Bank also got the power to place two non-executive directors to the TradeSafe board, along with management oversight of TradeSafe’s escrow account. The Bank plans to be fully involved in the process for payment instructions that TradeSafe initiates.
CEO of TradeSafe, 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.”
Kuben Chetty, head of client solutions at Standard Bank, said there was a strong need for a digital escrow solution within South Africa. He is one of the non-executive directors appointed by Standard Bank to TradeSafe. He said, “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”.