Being a new player in the market, one of the greatest challenges faced by Tazapay, a digital escrow service for cross-border trade, is the need to inspire trust among its users.
This week, Tazapay CEO shares with sme.asia the inspiration for setting up of Tazapay and the obstacles that he had to overcome at the initial stage.
What inspired you to set up Tazapay?
The collective Tazapay team has significant experience in business and finance, and we had recognised this issue for SMEs during prior roles in large organisations and had long thought about ways to address it. International trade is complex, requiring large amounts of documentation and adherence to specific terms and conditions, and for this reason the organisations with the capabilities to do it had tended to shy away from it. My colleagues and I really wanted to support this underserved group, and we see helping SMEs with this particular challenge not just an opportunity but an obligation.
We set about launching the company in early 2020, but soon realised as the pandemic took hold that the timing could not have been better. Traditionally, SMEs looking to work together often travel to meet and build rapport, take a look at the operations and so forth. However, COVID travel restrictions soon made this impossible. 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 tailor-made for the pressing needs of SMEs and B2B marketplaces.
What was the greatest challenge you faced while starting the business?
One of our challenges is that we are striving to be a purveyor of trust between trading parties, however we recognise that we are ourselves a new brand and need to inspire trust in Tazapay for our own users. There are a few ways we’re doing this. First of all is that we’re completely transparent about how and where the buyer’s funds are held and the conditions under which they will be released to the seller- namely when we’re confident the conditions for shipment and delivery have been met, which we confirm via an intense verification process that ensures all documentation is legitimate.
Additionally, we’re extremely focused on customer service, making sure the Tazapay team is available to help with any aspect of the trading process. Finally, we’re pleased to be aligned with established platforms and institutions such as Proxtera and Standard Chartered who are extremely supportive of our mission and help us reach a wider audience.
What other challenges do you see SMEs facing other than payments when initiating cross-border trade?
Shifting from analogue to digital is vital for SMEs yet will take time. As mentioned, international trade is inherently complex. There are many established rules to follow and it will always require large amounts of documentation. These complexities and the challenges associated with tackling them mean that things have largely remained the same for a long time, with a lot of activity remaining paper-based and relatively slow. While this makes the industry primed for change, the digital transformation journey will be long, and success will come from enabling business transformation in focused areas.
One of these is document verification, a core part of trade finance. Where it might take a human an hour to verify a standard set of documents associated with a cross-border deal, new intelligent technology can do it in minutes with up to 95% accuracy. This process also turns all documents digital, ready for further inspection including compliance. This speeds up the time to complete deals and helps to identify errors or discrepancies, boosting overall efficiency, further reducing risk and generating a wealth of trading data that can be used for better decision making in the future.
What other trends do you see developing over the next few years in the payments space?
We expect B2B payments will start to catch up with B2C payments in terms of ease of use and a comprehensive resolution and protection framework. Payments will move to local real-time networks rather than the cumbersome international wires, allowing international payments to become real time. We will also continue to see a proliferation of local wallets and these will increasingly become interoperable across borders.