Agreement marks important step in developing digital escrow as a universally trusted and accepted settlement method for trade and commerce.
Standard Chartered announced that it has signed a memorandum of understanding (MoU) with digital payments platform Tazapay to deliver digital escrow services to buyers and sellers looking to trade globally on Proxtera, a business-to-business marketplace network. This marks the Bank’s first Escrow-as-a-Service (EaaS) offering, as well as the first banking partner that Tazapay is collaborating with following its partnership announcement with Proxtera in February this year.
A commercialisation of the Business sans Borders initiative launched in 2018 by the Monetary Authority of Singapore and the Infocomm Media Development Authority, Proxtera was established in 2020 to carry out this programme with a vision to reduce friction in cross-border trade, especially for small and medium sized enterprises (SMEs).
Under the MoU, Standard Chartered will facilitate the opening of bank accounts required by Tazapay to receive and hold the escrow funds in both the buyers’ market and the escrow location, and enable the flow of funds to the sellers once Tazapay validates the escrow conditions for the release of funds – for example, evidence of delivery or receipt of goods from the parties.
The pilot transaction for the MoU will take place between Singapore and India after obtaining appropriate regulatory clearances, with more corridors to be added in due course.
Philip Panaino, Global Head of Cash Management, Transaction Banking, Standard Chartered, said: “We are excited to collaborate with Tazapay to democratise EaaS and enhance commercial trust between SMEs transacting on the Proxtera network. The MoU marks an important first step in our ambition to develop digital escrow as a universally trusted and accepted settlement method for trade and commerce, and demonstrates our ongoing commitment to enabling the sustainable development of SMEs, which are the drivers of economic growth and innovation in so many markets.”
Rahul Shinghal, CEO Tazapay, said: “Tazapay is committed to making cross-border commerce easier for SMEs. To do this most effectively means strengthening the ecosystem that supports them through partnership with other trusted players in trade and finance. We are pleased to collaborate with Standard Chartered and from here, work to provide SMEs the most safe, secure and easy way to hold and transfer funds via escrow. Together, we can offer better payment and financing options to SMEs, helping them to build trust with more trading partners and ultimately expand their businesses.”
Winston Nesfield, Programme Lead, Proxtera, remarked: “Standard Chartered is one of original supporters and partners of Proxtera. As the leading banking major in Asia and Africa, it is great that they are joining as an Escrow Banker, while Tazapay operates as the Escrow Agent for Proxtera Protect. This partnership will open up Proxtera’s reach to Sub-Saharan Africa, given the existing broad network that Standard Chartered has there.”