ESCROW Services Will Curb Online Fraudsters and Cons in Kenya and Beyond

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Valentine Kilonzo, founder and CEO of JointPesa, Kenya’s first escrow service provider.

By Valentine Kilonzo

The global e-commerce market is predicted to grow to 4.9 trillion US dollars by 2021 according to the forecast from Internet Retailer, a digital commerce 360 brand. In 2019, one in every ten dollars spent globally was spent online, and by 2022 online sales will make up 17% of all global consumer sales.

The rapid growth of e-commerce has seen Kenyan consumers increasingly turn to online and mobile channels to make purchases that they traditionally would have been bought in open air market and supermarkets, such as electronics, fashion and even fast-food. This deflection of spend has been catalyzed, in part, by the rise of online marketplaces and the on-demand economy against the backdrop of new purchase experiences like click-and-collect and mobile order-ahead.

As more purchasing activities move online, retailers must also be cognizant of mobile’s growing share of digital commerce. By 2030, the number of online and mobile transactions will exceed the number of traditional transactions in Kenya. This will make mobile not only the primary computing platform for the world’s population, but the top digital commerce channel as well. Businesses must therefore keep in mind that mobile will increasingly be the first and often times only, touch point they have with a shopper. Designing purchases experiences that can be easily consumed on small screen will be imperative to keeping conversions rates high and consumers satisfied.

As payments move online especially this time when government is encouraging people to order items online, the growing threat of online theft is a real concern. The always-growing popularity of online shopping has made it a top target for fraudsters across the globe. With every step trader take to tighten security and prevent malicious activity, cons seem to up their game and outwit them.

E-commerce dealers need to recognize the need to bolster their protective measures to safeguard their monies. Fighting fraudsters and online thieves can best take two different fronts. For one, you have to protect yourselves from schemes targeting merchants. But on top of that, you also have to protect your customers from scams as well.

For e-commerce businesses, it’s vital to have escrow services to protect buyers and sellers by acting as third parties that collect and hold payments from buyers to be released to the sellers when the buyers are satisfied or based on agreements. Escrow for instance the recently launched JointPesa, would therefore mean creating a commitment bridge between buyers and merchants. This is a safe way to strike a balance between the power given to the customer and credibility of merchants, eliminating fraud.

The major challenge online sellers and buyers face is in providing a smooth and brisk payment transactions structure for their Marketplaces. Kenya for the first time has pioneered first escrow service, JointPesa.  Since trust is still a big issue with online shopping in Kenya, JointPesa innovation is meant to create commitment between buyers and merchants. This is a safe way to strike a balance between the power given to the customer and credibility of merchants, eliminating fraud.

With the right precautions in place, e-commerce can in Kenya can grow significantly over the next ten preferably by embracing the available escrow payment services like JointPesa.

The writer is the founder and CEO of JointPesa, Kenya’s first escrow service provider