A new payment system aimed at taking the risk out of online trading has launched in South Africa.
Pay2 is an escrow service that promises security with an online trade that protects both buyer and seller.
“The service is aimed at everyone who wants to trade online that is risk adverse. From the sale of a small item to something we just completed on behalf of a major soft drink company, which exported R3m of drinks to Europe,” Robert Weimar, senior executive at Pay2, told Fin24 on Wednesday.
“Both parties never met, but as a result of the facility of e-escrow they traded. Now we are getting a weekly export as the system worked out so well and we mitigated the risk of not getting paid on supply or not receiving the goods. We are currently on 15 different e-commerce sites, the most important being OLX,” he added.
The system works by creating a Pay2 account. You input your bank card information and load the account with money and the system allows payments from credit and debit cards, as well as electronic funds transfers (EFTs).
“You can pay anyone whether they have an existing Pay2 account or not. Paying is as easy as entering the person’s cellphone number, the payment amount and a payment reference. Then choose how you want to pay and press Pay. Pay2 alerts the person you paid of the payment. The person can withdraw cash from the Pay2 system,” Weimar said.
Pay2 charges R6 per transaction, a 3% handling fee for sending money from a credit card, and R10 for cash withdrawals. Receiving payment into Pay2 is free.
In 2015, Standard Bank announced support for the Shepherd escrow service with a R30 minimum charge. That service employs couriers to deliver products and beat common scams where people fake bank deposit slips.
“This platform will increase the use of credit cards and EFTs as now people feel safer by making payments to us as an intermediary we have no desire to hold cash that is not ours we merry use technology to facilitate payments. So refunds are important when the transaction is withdrawn by all parties,” Weimar said about Pay2.
Because the system relies on the use of a cellphone instead of a payment machine, roaming service providers such as plumbers or electricians can confirm payment before they leave the premises.
“Pay2 is plugged into e-escrow and e-escrow is plugged into a series of trust accounts in the banks. Trust is ensured by means of trustees that manage the flow of funds and Pay2 is supported by the Banks,” Weimar said.