Last week my son attempted to sell an electronic item on Gumtree. In the past I have only sold furniture on Gumtree and it has overall been a good experience. However, what I quickly discovered was that selling electronic goods brings out the scamsters in full force.
I had one very persistent man who was going to send a driver to collect the item and would send me proof of payment before I handed over the item. Fortunately, because I write about these topics, I know that a proof of payment can be forged or the transaction reversed before it gets to your bank account. When I insisted on payment with the delivery, he disappeared.
Third-party payment services
Since then I discovered the Gumtree payment service Shepherd which holds the funds until the goods are delivered, protecting both buyer and seller, and includes a courier service. You can quickly assess someone’s genuine interest in the item by saying that you will only work through Shepherd. If you don’t hear from them again, it was probably a con.
Another option is TradeSafe which was launched after CEO and co-founder Jethro O’Brien was duped while trying to buy car parts that had been advertised online.
TradeSafe is a licensed, independent fintech company that safeguards a buyer’s funds in trust (escrow) until the seller delivers what was promised. Only once the buyer is happy with the goods or services received, does TradeSafe release the funds. The company is authorised as a third-party payment provider with the Payments Association of South Africa (PASA).
“We act as a buffer between a buyer and a seller. The funds are deposited with TradeSafe, in full while the two parties perform the transaction. Our system is totally transparent and payments are tracked and visible to all parties. Amounts have ranged from a few hundred Rands to a few million,” says O’Brien.
If the buyer does not have the funds, the transaction will not start, and if the seller does not deliver what was contracted, he or she will not get paid. TradeSafe does not get involved in delivery. It waits for the go-ahead from each party before releasing the funds.
According to O’Brien, its Application Program Interface (API) is the first of its kind in South Africa and allows almost any business or individual to easily plug into TradeSafe’s escrow platform and is not limited to a single platform or sector.
TradeSafe’s current top five income sectors are freelancing, general goods such as cellphones and electronics, motor vehicles, fuel and commodities (diesel and chrome), and rental deposits.
TradeSafe can also be used for transactions that do not involve the exchanging of physical products, such as accommodation bookings, much like Airbnb, where upfront payment is required to secure a booking but funds are only released at the time of travel to the accommodation provider upon checking in. The platform also allows for progress or milestone payments for projects or bookings that are phased.
O’Brien says TradeSafe will soon be an accredited international third-party payment provider which means it will support transactions in more than 24 currencies.
This article first appeared in City Press.