Tech in Africa
Standard Bank Group is the continent’s largest banking group in assets with a market cap of $23 billion as of June 2019. The announcement that Standard Bank has acquired a 35% equity stake in TradeSafe Escrow, an independent online escrow platform, is a major booster for the South African fintech startup. The amount of the actual investment remains undisclosed.
Founded in 2013, TradeSafe protects buyers from the risk of paying strangers online. It is the longest-running South African escrow platform. Only when the buyer receives the goods and services agreed upon does the payment get released. TradeSafe is the first digital escrow organization with an API gateway allowing online stores and marketplaces to offer escrow payments to their customers.
“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” said Jethro O’Brien, the CEO TradeSafe.
He later added that the platform has added Standard Bank’s host-to-host technology allowing for automated payments. A second payment function is expected to be released, one that increases governance, credibility, and security and targets M&A transactions exceeding ZAR 25 Mn. New payment gateways in TradeSafe’s API are Ozow and SnapScan.
As part of the package, Standard Bank appointed 2 non-executive directors to the TradeSafe board. Standard Bank offers management oversight of their escrow account and is fully involved in the payment process TradeSafe initiates.
Kuben Chetty, the Head of Client Solutions Standard Bank, intimated on the need for a strong escrow payment solution in South Africa due to the rise in digital transaction that could expose buyers and sellers to online fraud. He added, “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.
