Standard Bank acquires 35% equity stake in SA escrow firm, TradeSafe.

Standard Bank has procured a 35 percent equity stake in South African escrow startup, in exchange for an undisclosed funding.

TradeSafe is an online escrow platform that safeguards the buyer’s funds in trust in a transaction involving two or more parties.

The startup’s escrow platform ensures funds are only released to the seller, and other approved beneficiaries, once the buyer receives the goods or services in the agreed condition.

Chief Executive Officer (CEO) of TradeSafe, Jethro O’Brien said, “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. This means that with our increased governance, security and credibility, TradeSafe will now be able to target commodity and M&A transactions greater than ZAR25 million (US$1.5 million.)”.

Adding on to the investment, Standard Bank has appointed two non-executive directors to the TradeSafe 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.

“We also employed Standard Bank’s proprietary host-to-host technology which allows for automated payments,” O’Brien further said.

Head of Client Solutions at Standard Bank, Kuben Chetty said there was 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.

“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,” Chetty added.

TradeSafe which was launched in 2013 claims to be the first digital escrow organization in the world to offer an API gateway which enables online marketplaces and stores to offer escrow payments to customers.

The procurement comes after Standard Bank launched its own escrow service leveraging the TradeSafe platform.