Mistrust, fear of fraud and payments security are commonly pointed to as reasons why e-commerce has been slow to take off across Africa. Pay-on-delivery has proven the most successful route to getting consumers to try online shopping – but, let’s be honest: it’s not the real deal, is it? Now, Nigerian startup LockMyCash thinks it has the answer.
LockMyCash has developed an online escrow service which caters to the needs of both merchants and consumers. It acts as a trusted third party, holding payment from the buyer until the buyer is satisfied with the purchase or service; while also saving merchants from the risk of pay-on-delivery.
“The e-commerce space in Nigeria and Africa is faced with challenges where buyers are scared of not delivering the exact item ordered, or it not even shipping at all; and sellers are scared of delivering items without receiving payment,” says Tosin Oguntuyi, founder of LockMyCash.
“The pay-on-delivery model is one-sided protecting more of the buyers’ interests. LockMyCash changes this, and adequately protects both buyers and sellers.”
Once they have registered, users – merchants or consumers alike – can create a transaction, by entering a description of the purchase item(s), cost, inspection period, and the like. The other party is notified, and can confirm or modify the transaction details.
On confirmation, the buyer makes payment, with the funds held in escrow until the seller delivers according to the specified transaction terms.
On receiving the items, the buyer can inspect them and either mark the transaction as completed, at which point the funds are disbursed, or submits a dispute.
To ensure honesty regarding delivery of items, LockMyCash requires sellers to use logistics services with a “tracking” option; although the startup is currently in the process of integrating various Nigerian logistics companies to enable users to track deliveries through the LockMyCash platform.
“As for security, we employ industry standard SSL (Secure Sockets Layer) and TLS (Transport Layer Security) cryptographic protocol to securely encrypt all data transmitted on and via our platform,” Oguntuyi says.
The startup makes money by charging a small fee on each transaction.
Launched in late 2016, LockMyCash is currently in the process of onboarding new merchants; with current users ranging from those looking for freelancers – such as listing writing or development contracts -, to e-commerce sellers.
Overall, Oguntuyi believes LockMyCash has created a solution which provides security and assurance for all involved in the online selling process, and thinks the startup may contribute to giving Nigerian e-commerce a boost.
“We protect buyers by ensuring they get exactly what they ordered, promptly delivered, based on an agreement, and we protect sellers by ensuring they get paid for items or services delivered.”