Securing payments from Africa and abroad – e-escrow moves north

Home grown online payments service e-escrow is expanding into Africa and India as demand for the service grows apace. In this special podcast, founder and CEO Llewellyn Morkel tells Alec Hogg about the progress – and uses a couple of examples to explain how e-escrow saved one business from a chunky loss (and could have done so for another). There’s also a free giveaway of 10 branded power banks; details towards the end of the interview.

This special podcast is brought to you by e-escrow.co.za whose founder and chief executive Llewellyn Morkel is with us in the studio. Llewellyn, you’ve had some interesting developments at your company lately. We’ll get into that in a moment, but just tell us about the fake camera transaction we were talking about before we walked into the studio.

That was a transaction where we saved a company R21,000 on a fake credit card transaction. The transaction came in. The bank cleared it as a good and normal transaction and in any other business; you would have handed over the goods right there. With e-escrow and our processes and procedures, we were able to double-check and validate the transaction and we stopped it before the money was paid over, and before the goods were handed over. In that sense, we saved somebody R21,000.

What system were they using that they could have gotten away with it in the normal course of events?

Normal online shopping. It was an online shopping transaction where a credit card was tendered as payment and it went through the channels. E-escrow is now integrated with six websites already, where we are the primary payment mechanism, with more coming on every single day.

Had the website not had e-escrow and just a normal POS (point-of-sale) back-end, the transaction would have gone through, presumably. When would they then have discovered that it was fraudulent?

Only at the point where the credit card transaction becomes cash. In other words, where the money needs to be paid over to that bank account.

That could be a few days.

That’s a couple of days, and by that time, the fraudster is long gone. In a normal e-escrow transaction, we take over that credit card payment process, so when you integrate with e-escrow; instead of having a credit card payment system, we take that over and we then validate transactions.

You then become responsible for that.

We take the risk.

We were also talking about an unfortunate situation for an Audi service centre.

Correct. As far as I know, it was an auto body-repair shop, which was scammed out of R17,000. Where they would usually take a 50 percent deposit, the person neglected to pay that. They continued with the work and after the work was finished, they contacted the client and said, “Listen, you can come and pick up your car but remember to bring the payment.” The client arrived saying, “Listen, I’ll do the payment via EFT on my laptop while I sit here, but can I quickly take the car for a drive?” As the person took the car for a drive, he chucked the attendant/steward of the shop out of his car and he drove off with his vehicle. The auto body-repair shop is R17,000 in the red.

How would you have helped them?

We take the money into an escrow /trust account, upfront and that guarantees that the auto body-repair shop would have been paid. In the event that an auto body-repair shop (or anybody else) needs some of the cash to get the work done, we will provide them with an advance on that cash. The point is that unless we have the money in trust, that money is not safe in their pocket.

Does it happen often, that you get crooks doing this kind of thing?

All the time. The weaker the economy gets, the more desperate people will become and the more often this will happen to businesses.

What happens next for you? You’re starting to make a lot of progress in South Africa. What about other parts of the continent?

The vision for e-escrow has always been to get into Africa and to cross the boundaries in terms of transacting across borders. We have signed up companies in Zimbabwe, Zambia, and Malawi. Those three have just been signed in this week, so e-escrow will become intercontinental in that sense.

When you say ‘signed up’…how?

We get partners in those countries to start a business/register a business in that country. They will then adopt the e-escrow software and we will have joint shareholding in that. How that works is we then secure across border transactions. A company in Zambia might want engineering services from South Africa. They would pay the money into a Zambian bank account – into our e-escrow trust account in Zambia. Zambia would approve that transaction on our behalf and give South Africa the ‘go-ahead’. We will then guarantee that transaction for the engineering company in South Africa.

It’s three so far: Zambia, Malawi, and Zimbabwe. What are your ambitions?

International, at one point. We want to start with Africa, especially SADC (get that covered).

I would have thought Botswana would have been in there, given all the positive publicity that it gets. What happened?

We are inviting companies from all over Africa to contact us and say, “I’d like to start an escrow company’ in Botswana, for instance. Those are just the first three countries that approached us.

What about India?

That’s the ‘big news’ story. E-escrow in Indian will probably be the first one to launch internationally. As we know, they’re a big economic partner of South Africa (they’re part of the BRICS countries) and we will do business with them across borders, using e-escrow.

Have you been there yet? Have you put a stake in the ground?

Yes, we have. The business has been registered. The domain has been secured, so watch this space within a couple of days.

If you were a South African business that is doing transactions with India, would it work the same way as you’ve described a moment ago, on the Zambian front?

Exactly. We’re pretty far in negotiations with a big corporate partner to just, carry us through it. It’s a banking partner and that banking partner is present in both countries. How that would work is you would basically, pay money to an escrow trust account and we would guarantee that across borders. It does not affect the transfer of money across borders. It really, just gives you the opportunity to guarantee the funds across borders. Somebody in India would check the funds, guarantee it, and validate it for us and we will give the ‘go-ahead’ and the guarantee in South Africa. The normal money transfer process between countries will remain the same.

But you do have the security if you’re the manufacturer or the exporter from South Africa, to know that your money is safe and you’ll be getting it.

Even before it’s come over the border. We guarantee it. We verified it in India. We know that money’s there. The time that it’s going to take to cross borders… We’re happy for that process to take place. In the meantime, we’ve guaranteed the cash and that engineering company can go ahead and start manufacturing, which saves time.

You have some giveaways.

Yes, we do. For ten listeners, ten readers, or ten subscribers, we’re happy to give away ten power banks (e-escrow branded power banks). As you know, in the economy today, we don’t always have power. It’s always handy to have a power bank.

Yes. You can never have too many of them. What’s the process? Who gets them?

Let’s make it the first ten that SMS’s the word e-escrow to the number 47470. We’ll give it away to them.

E-escrow 47470 – just a little SMS and away you go.

That’s correct.

You’ll get yourself a power bank – something to help you keep your cellphone going, etc.

A mobile cellphone charger and its R2 per SMS. I need to say that and the first ten gets one.

Llewellyn Morkel is the founder of e-escrow and this special podcast was brought to you by e-escrow.co.za.

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