Standard Chartered (LON: STAN) has committed to a Memorandum of Understanding (MoU) with payments company Tazapay in order to provide digital escrow services to buyers and sellers interested in trading globally via Proxtera, a B2B marketplace network.
The initiative is Standard Chartered’s very first escrow-as-a-service offering. It will be the first banking institution to work cooperatively with Tazapay following its escrow agency partnership with Proxtera in February 2021.
A commercialization of the Business sans Borders project established in 2018 by the Monetary Authority of Singapore (MAS) and the Infocomm Media Development Authority, Proxtera was introduced in 2020 with the stated goal of lowering friction in cross-border trading, particularly for SMEs.
Tazapay was established last year by former senior managers from large financial service providers including Stripe, PayPal, Grab and Standard Chartered. Tazapay has acquired nearly $5 million in capital Sequoia Capital India’s Surge, Saison Capital, RTP Global and January Capital (among others).
Per the terms of the MoU, Standard Chartered has agreed to support the opening of bank accounts needed by Tazapay in order to receive and hold the escrow funds in the buyers’ market and the escrow location, while allowing the flow of funds to the sellers after Tazapay obtains proof of delivery or receipt of goods from the relevant parties.
The pilot transaction for the MoU is expected to be conducted between Singapore and India, with additional channels to be introduced in the future.
Philip Panaino, Global Head of Cash Management, Transaction Banking, Standard Chartered, stated:
“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.”
As reported last month, Standard Chartered had made a strategic investment (subject to shareholder approval and regulatory clearance) in order to support a merger between CurrencyFair, a cross-border payments solution provider, and Assembly Payments, whose platform aims to fully automate complex payment workflows.