South Africa might be a few years behind the online shopping wave that’s sweeping the world, but we’re starting to catch up. Internet use is becoming more widespread – thanks to the prevalence of smartphones – and consumers are slowly warming up to the idea of paying through online payment gateways. That said, concern about the security of online payments is still a barrier to online shopping becoming widely adopted – as we discussed in our previous blog. With this in mind, we’ve created a guide on how to shop securely this Christmas.
Peer-to-peer transactions in informal marketplaces are booming
While online shopping entails buying and paying for goods through online retailers, online shopping in a broader sense includes the many online peer-to-peer marketplaces such as Gumtree and OLX. Traditional ecommerce might be taking a while to heat up to the levels witnessed in Europe or the States, but online marketplaces are booming in South Africa. Gumtree gets between 3 and 5 millioin unique views a month, according to BusinessTech, and OLX’s Facebook page has around 581,000 likes (according to data from social media research firm SocialBakers, reported on The Media Online – making it the most popular brand in South Africa. Consumers are opting for these marketplaces as a cheaper and more varied alternative to traditional eCommerce stores. But with greater online shopping freedom comes the risk of scams and fraud.
Economic crime is also rife in South Africa
South Africa might be lagging behind the rest of the world in terms of online shopping, but when it comes to economic crime, it comes out on top. PwC conducted a survey in 2014 and found that 69% of South Africans asked had fallen victim to some type of monetary scam or fraud between 2012 and 2014, that’s compared to 37% of people around the world. Given this prevalence of economic crime, the need for escrow services has never been greater.
Escrow services make easy online payment possible
Escrow services act as an intermediary between buyer and seller. Both parties sign up to an escrow service before making a transaction. The escrow service holds funds on the buyers behalf until they’re satisfied with the seller’s goods. The funds are then released to the seller. The transaction fee is split between the buyer and seller or incurred by either one. We’ve outlined a detailed description of how escrow services work here.
Our guide to secure online shopping:
Use a reputable site. Whether you choose to shop through retailers like Takealot.com or through the Classifieds on Gumtree, make sure it’s a well-known and trusted site that has support systems in place, should you encounter a scam. Don’t be tempted to reply to offers or promotions that find their way to you over email.
Create strong passwords. Most eCommerce sites and marketplaces require you to set up an account before you can buy and sell through them. When doing this, create a strong password, and never use the same password more than once across different websites.
Don’t make payments in a public space. Given the prevalence of WiFi in public places, it’s even easier to shop online. As tempting as it may be to shop on the go, avoid making purchases while you’re using a shared WiFi network. Making payments in a public place, you also run the risk of opportunistic fraudsters looking over your shoulder and seeing your sensitive data on the screen of your laptop or smartphone.
When using marketplaces like OLX or Gumtree, always ask to see product first, especially if it’s a large purchase. If the seller lives far away, ask for detailed images and ensure you ask detailed questions about condition of product and whether the seller is the first owner.
Use an escrow service. Even pictures and sellers can deceive. That’s why the only secure way to make sure the goods you’re buying warrant the money you’re spending on them is to use an escrow service. It also protects sellers against non-payments from buyers.
The cost of a scam is far greater than the marginal fee you pay to use an escrow service. If you’d like to find out how an escrow service can make easy online payments a reality, download the ProtectPay brochure.