As traditional and virtual banking converges, many banking institutions are leveraging on fintech to deliver customercentric accessible services. This informs the latest move by South Africa’s biggest financial institution, Standard Bank to acquire a 35% stake in South African fintech, TradeSafe, an online escrow platform that safeguards the buyer’s funds in trust in a transaction involving two or more parties. Established in 2013, Tradesafe was the first digital escrow organisation in the world to offer an API gateway which allows for online marketplaces and stores to offer escrow payments to customers. A leverage that makes it a leading disruptor in the industry which informs the interest of Standard Bank which has pan-African subsidiaries across many countries of the continent trading under the name Stanbic. As part of the investment, Standard Bank has appointed two non-executive directors to the board. Standard Bank also has management oversight of TradeSafe’s escrow account and is fully involved in the process for payment instructions that TradeSafe initiates.
Speaking on the acquisition, the CEO of TradeSafe, Jethro O’Brien, said that 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. “The bank will provide a second release payment function,” O’Brien added, saying that “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.”
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TradeSafe API offering also incorporates new payment gateways such as SnapScan also acquired by Standard Bank and Ozow. “We also employed Standard Bank’s proprietary host-to-host technology which allows for automated payments,” added O’Brien.
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Kuben Chetty, Head of Client Solutions at Standard Bank, expressed that there is a strong need for a digital escrow solution within South Africa given the rise of digital transactions and especially as buyers and sellers seek ways to mitigate transaction fraud. Chetty added that, “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.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry