Bank offers secure service to protect online shoppers
Escrow keeps cash in trust till it’s safe to release it
Making transactions safe through a service known as escrow has traditionally been reserved for larger transactions but, Standard Bank is now offering a digitised escrow solution so you can transact safely when buying or selling items privately.
Escrow means to place your money in custody or trust until a specific condition has been fulfilled. Traditionally escrow accounts were designed to provide an additional layer of security to buyers and sellers involved in a direct transaction such as buying a car or luxury items, or doing home renovations.
In this case, Standard Bank collects the buyer’s money, which is then held in a bank managed account until all specified requirements and conditions agreed to between both parties are met.
And had Kayla Steenkamp known about the service a few weeks ago, she wouldn’t have been duped into parting with R4,500 for an exercise bicycle that never arrived.
Steenkamp saw the bicycle on an online advert and contacted what she thought was
Econo Sports. Marlene Chambers called her back and said the bike would be shipped from Welkom to her in Cape Town.
Chambers e-mailed her an invoice requesting proof of payment before the bicycle would be delivered within three to five working days.
After a week, she called to query, but her calls and emails were not returned.
On investigation she found Econo Sports on Facebook, with a prominent warning that “Marlene” is unlawfully trading under the company name.
“We have tried to make contact with this lady numerous times, via phone calls, WhatsApp and e-mails, but she does not answer and has blocked us on WhatsApp,” the post reads.
Econo Sports further states it and previous clients have reported the case to the police and urged consumers to thoroughly investigate before paying over any money “as there are a lot of scammers out there preying on innocent people”.
Holding your money in trust
Kuben Chetty, head of client solutions at Standard Bank, says the need to safeguard against risks such as potential fraud is heightened given the change of consumer purchasing habits spurred by Covid-19. Statistics released by Sabric, the SA Banking Risk Information Centre, show that a total of R278.5m was lost to digital fraud in 2019, up from R262.9m in 2018.
“As it is ultimately a transaction between strangers, [it] can expose buyers and sellers to fraud without any recourse.”
Standard Bank is leveraging its investment in TradeSafe, a digital escrow platform.
How it works
Standard Bank clients can open an escrow account using online or cellphone banking. Your money remains in an escrow account until you inform the bank you have received the goods or services you paid for.
Non-Standard Bank clients wanting to use the escrow service as a buyer can digitally open a Standard Bank MyMo account, a low-cost account with a R4.95 monthly fee.
When you register an escrow purchase, you also specify the terms and conditions of the purchase. The seller can either accept or renegotiate. Fees for the escrow service are a percentage of your transaction, with a minimum fee of R115.
What the other banks offer
Absa’s escrow facility for property, business, vehicles and software is only available through attorneys, says Bongiwe Gangeni, deputy chief executive of retail and business.
Nedbank clients can use an escrow service at a flat fee of R5 per transaction, to purchase goods and services on its recently launched Avo app.