Tazapay to ramp up digital escrow service in four Asian countries

Tazapay, which provides a digital escrow system, is set to ramp up growth in February this year.

Source: Tazapay.
Shinghal.

According to Tazapay, large organisations manage the complexities of international trade easily, but smaller businesses typically rely on trust to transact. When negotiating with a business for the first time, neither party has any assurance that the goods or the payment will arrive. Pre-COVID, a key part of establishing trust would have been to visit a potential business partner, seeing their operations and meeting the people. but with travel curtailed today, trade has been hobbled.

Tazapay's escrow platform holds funds until goods have arrived, providing peace of mind to both parties in a deal. The company will focus primarily on small and medium sized enterprises (SMEs) looking at trade deals in the tens of thousands of dollars, particularly commoditised/bulk goods such as apparel, accessories, electronics, and homeware.

Rahul Shinghal, CEO & Co-Founder, Tazapay, noted that the total addressable market for SME B2B cross-border trade in Southeast Asia is around US$500 billion. "Asia is a collection of markets of varying size and maturity and with expertise in and access to different resources, meaning many countries rely on those around them to supply goods and products that they may not easily be able to obtain at home," he said.

"Singapore is a good example of this as a small country with limited space and resources. Asia has also maintained some of the tightest travel restrictions in the world, which while effective for containing the virus, have led to an ever-increasing trust deficit between potential business partners. Tazapay’s digital escrow solution is tailormade for the pressing needs of SMEs and B2B marketplaces."

Shinghal, who has helmed regional operations for PayPal and Stripe, explained that Tazapay does not have competitors. He said: "For large transactions, banks have always offered letters of credit, but these can be unwieldy and inaccessible for small businesses. Although the solution to this problem for smaller organisations has always been clear - a digital escrow solution - international trade will always be complicated and those with the ability to take it on have shied away from it. Tazapay is committed to embracing this complexity and providing a fully digital, easy-to-use platform that is easy to access and integrate into merchants’ workflows.

The escrow model eliminates scams, Shinghal said. "Tazapay is enabled to conduct pre-vetting on both the buyer and the seller. The very nature of an escrow solution ensures that fraud is prevented. The seller will only ship items when funds are in the escrow account. The seller will get the funds on successfully uploading the shipping documents. The case of a buyer refusing to pay doesn’t arise or the case of the buyer not shipping after getting the money also doesn’t arise as the escrow funds are only released after Tazapay has verified that the shipping has actually happened," he said.

Tazapay will launch in full in February across Singapore, Malaysia, Thailand and India, all part of significant trading corridors within the Asia Pacific region. Merchants in these markets can sign up to use the Tazapay escrow service online.

Beyond digital escrow, Tazapay will also offer company background checks and counter-party risk assessment.