The con artist, walked away with his Sh40,000 ($400). This is what inspired his journey towards starting a business named Escrow Kenya.
“I saw a great deal on an iPhone posted in a buy-and-sell Facebook group. I expressed interest and discussed the sale for a while before I finally decided to buy. Everything about the seller checked out all right–he had a Facebook page with more than three thousand likes and posted regularly; his profile was complete with real photos of him and he had been on Facebook for 4 years. I had enough reasons to trust him, except they were the wrong reasons.” Mr Kamaru narrated to The Exchange.
Soon after sending the money, Robert could no longer access the recipient anymore.
“Not his profile, not his page, not even on phone. He blocked me and disappeared with my 40K.” he recalled.
This is a common incident when it comes to buying and selling online. Other sellers have also fallen prey to these rogue sellers who pose as genuine only to flee with the money sent to them and switch off their phones. The rate, at which these cases are reported on a daily basis, is alarming. There is even an online Facebook group called Buyers beware. Here, People post stories of the numbers and Facebook profiles that have conned them to alert potential buyers of them.
“Consequently, majority of Kenyans have lost faith in online shopping off e-commerce platforms. My desire to restore confidence in small-scale online business is what drove to me to venture into escrow.” Mr Kamaru noted.
Armed with a capital of Sh3 million ($29,460), Kamaru set out to launch the online platform to provide Escrow services in Kenya.
Escrowkenya.com protects buyers and sellers in a sale by coming in as a trusted third party that holds the buyer’s payment while a delivery is in progress and releases the funds to the seller once the delivery has been received and accepted. If something goes wrong and the delivery cannot be done, the buyer gets their money back.
“Although the Online Pesa Kenya brand has been around since 2013, offering PayPal to Mpesa services to Kenyan online freelancers and businesses, the company was officially registered in March 2018. We hope to capitalize on the good reputation we already enjoy in the online business space, as far as trust and efficiency goes; and sure enough, it is already giving us good business.” Kamaru explains.
Since the launch on October 1 2018, the team has signed up at least 300 users and secured 33 transactions with a gross value of Sh87,700 ($861).
“We hope to enable buyers up-country to buy directly from sellers in Nairobi and other major towns without having to travel all the way. Our vision will be actualized when a small-scale trader in Kisumu will be able to connect with and get a quote from a small-scale wholesaler in Nairobi via Facebook or WhatsApp, secure the purchase via escrowkenya.com and confidently wait for the delivery to arrive as the seller equally knows that their money will be released when the buyer receives the delivery.” Mr Kamaru says.
Majority of his clients are clustered in and around Nairobi.
“Others are online freelancers are especially loving the security offered when hiring writers and trading their wares. We have also secured a few transactions involving the sale of shoes, clothes, laptops and smartphones.” He said.
This however does not come easy, Mr Kamaru has had to face several hurdles. Among them, he says the biggest one so far is trust issues.
“In as much as escrow seeks to bridge the trust-gap between two parties in a contract of sale, there is still the dilemma of transfer of trust issues to each party against the service provider. While we may be totally sold out on one party, say the seller, the escrow transaction will not happen until we earn the other party’s trust as well.” The founder explains adding that through massive campaigns, he hopes everyone will already be aware of the existence of the service when the other party in the transaction suggests the use of escrow.
If a delivery is rejected or not received, the buyer raises a dispute, prompting the seller to provide evidence or more information. They can either mutually agree to close the dispute by issuing a refund (full or partial) or escalate the issue to us for review and determination, based on the evidence provided.
How Escrow Kenya works
- Buyer and seller agree to terms of the sale.
- Either party starts a transaction on the website by filling the order form and indicating the other party’s email address and phone number.
- The other party receives an invitation to join the transaction.
- Once the invitation is accepted, the buyer deposits funds into escrow.
- The seller proceeds to make the delivery.
- Once the delivery is completed, the buyer inspects and approves the delivery.
- Funds are released to the seller.
Escrow aims at helping various users in Kenya ensure those who pay for services get what they paid for. Most individuals and businesses that hire people to offer certain services such as web design and development often end up getting a raw deal.
“Either the person runs off with the deposit paid up front, takes forever to finish the task or delivers low quality work. By holding funds in escrow and setting deadlines, we ensure that service providers fulfill their end of the bargain.” He says.