Founded by Caesar Waganagwa, Verinet Escrow is a new escrow service set to enhance trust between online sellers and buyers based in Nairobi Kenya as e-commerce grows day by day.
Verinet aims to allow buyers to secure their money, await delivery of their goods before sellers receive payments from the system and hold money temporarily until the buyer confirms receipt of the goods.
“Verinet Escrow App has taken online buying and selling in Kenya to a whole new level. Buyers can now use Verinet Escrow to pay for products or services without the fear of non- delivery or non-conformity to the agreed specifications, standards or scope. said Mr. Waganagwa about the app.
Now available for Android users, the platform is targeted at both online buyers and merchants who want to increase their sales without losing money to online fraudsters.
The team says it is a well thought out App with an inbuilt dispute handling mechanism especially to non-delivery within the agreed time frame or product specifications, standards or scope of task.
“The App allows the buyer an opportunity to describe the product or service being paid for right at the point of initiating a new transaction. As soon as the buyer initiates a dispute from within the App, a link will be provided allowing the buyer to upload any other supporting evidence to the claim. The Seller will have a chance to respond to the claim. The Arbitration Team at Verinet will rely on the evidence presented on the platform to make the final determination.
The challenge is, resolve at whose cost? The buyer and seller will end up losing some money each to Verinet, and Verinet will also spend money and time to come to this conclusions. Conflict resolution is expensive as it needs lots of verifications and some of the goods will need to be returned. Handling resolution will consume much more time and resources for Verinet than initially thought. And if they put a high charge on their escrow services, users will stick to Lipa Na M-PESA on delivery or pick up.
Escrow services in 2019 are beyond facilitating payments, and managing fraud on both the seller and buyer’s side is not a walk in the park. Providing support and resolving disputes between buyers and sellers will likely make the service unnecessary especially if one could just give themselves time before ordering a service or carefully read the terms and conditions of a merchant before buying from their website. Escrow was killed the day online stores started allowing Cash on Delivery and no one needs an escrow service when they choose to pay after receiving their goods.
Escrow services are not new in Kenya, as the list of similar apps is long but most of them are dead now. However, that does not mean that escrow services are not needed. Online e-commerce is just at 1 percent in Kenya, and with its growth, there will be an increasing need for escrow services. Marketplaces with reasonable volumes like Jumia, however, are launching their own payment platforms such as JumiaPay with inbuilt escrow services.
Currently, the application features M-PESA as the mode of payment but is set to add more additional payment methods. The target now is to help buyers secure their online payments, especially to unknown merchants.
The app is fully integrated with M-PESA and users simply log in to the app, indicate the M-PESA number they wish to pay to, the amount and a brief description of the goods or services then click send. Once the buyer confirms receipt of goods or services, seller receives payment instantly. Both sellers and buyers will receive SMS notifications confirming each stage of the transaction and prompting each party on what is expected of them.
“In the case of non-delivery, the buyer can cancel the transaction in which case the funds held on the Verinet Escrow platform will be reversed automatically to the buyer’s M-PESA account after 3 hours,” said Waganagwa.