Online marketplaces like Fiverr, Jiji, Jumia, and Konga along with social channels like Facebook, Instagram and WhatsApp have made digital commerce a lot easier for buyers and sellers in Africa. However, one friction point that still exists is in the payment processes across these platforms. Typically, most marketplaces allow sellers and service providers list their products and services, while the exchange of money, goods or services takes place offline. For goods based transactions, buyers and sellers must meet somewhere in person and hope the transaction is genuine. While for service-based transactions, buyers and sellers have to continuously hope that each party delivers their end of the bargain when due.
Safety and trust are the most significant factors when it comes to trading via online marketplaces. Therefore, marketplaces need to be designed in a way that payment security is guaranteed while also inspiring trust between buyers and sellers. Digital escrow payments could help marketplaces provide safety and trust for their buyers and sellers for the following reasons:
The whole idea of using an escrow service is to prevent fraud. When money is held in escrow, buyers and sellers become accountable to each other, eliminating the risk of being defrauded. Since the buyer knows that the funds won’t be released to the seller until the order is genuinely delivered, and the seller knows that the buyer is genuinely interested in the order (having committed funds into escrow), both parties become indebted to carrying out their end of the bargain, thereby guaranteeing a secure purchase.
People are usually skeptical when it comes to transacting with strangers. The main role of escrow is to verify the identities of the transacting parties to be sure they genuinely exist. When the parties involved in a transaction are unaware of each other’s identities, escrow acts as a third party, offering to guarantee the trustworthiness of the sellers and the buyers. In situations where a transaction breaks down, the escrow can easily pinpoint the defaulting party.
Promotes customer loyalty
A vast majority of online marketplaces and classifieds platforms in Africa operate the same way – sellers and service providers list their products and services, while the exchange of money takes place offline. Providing escrow as an extra layer of security to users on your marketplace will distinguish your platform from others. Having escrow in place gives buyers the confidence that their money is protected, while invariably giving sellers the impression that they are dealing with only genuine buyers. When you give buyers and sellers the feeling that you care about the security of their transactions, you automatically win their trust and keep them coming back.
Accountability, security, and transparency should be the bedrock of any marketplace transactions and these are the blocks on which the Vesicash Escrow technology is built. Vesicash Escrow offers a brisk payment solution for both small and big marketplaces – helping your marketplace to develop smarter business models for both buyers and sellers. Our escrow technology can be seamlessly integrated into your marketplace promptly. You can request access here.