More households and businesses turn to renewable energy solutions, Standard Bank data shows
Recent persistent power cuts in South Africa have seen many households and businesses turn to alternate energy sources, including solar energy as a means of power continuity.
However, solar kits don’t come cheap. The average buyer in South Africa will have to spend a considerable amount upfront to buy and have a solar kit installed. In addition, most solar kits are imported and resold by suppliers who are not well known in the market, creating a potential for distrust and uncertainty between transacting parties. Therefore, by leveraging a secure payment system, it allows for peace of mind for both the buyer and seller.
Data gleaned from Standard Bank’s Escrow platform has seen an increase in renewable energy transactions. The bank’s digital escrow solution is bridging the trust gap in this high value sector, giving customers the peace of mind that their funds are secure whilst waiting to receive their products and suppliers benefit from guaranteed sales with zero friction.
The most common transaction type that customers are opting for, is milestone-based pay outs. Standard Bank allows milestone transactions (progress payments) where a portion of the principal amount is released upon the completion of certain milestones. For example, in the most recent renewable energy transaction worth R240,000, 15% of the funds were released after the inverter had been delivered to the customer's premises, 30% after the solar panels and brackets were delivered, 30% after the lithium batteries were delivered, and the remaining 25% after all components had been delivered and installation was complete.
The ability to release payments in milestones are enabled by the South African fintech, TradeSafe. TradeSafe is a strategic equity partner of Standard Bank and critical to the enablement of the Standard Bank Escrow platform. Standard Bank LookSee an integrated platform for homeowners, also leverages TradeSafe’s technology to ensure that online transactions are executed in a seamless and secure manner.
Another unique space that TradeSafe is supporting is Enterprise and Supplier Development, where South African corporates are required to support local black owned SMMEs. The biggest challenge facing this space is that these SMMEs traditionally do not have the financial capacity to meet the capital requirements of the supply contracts that they are awarded. The TradeSafe platform enables corporates to effectively fund the empowered SMMEs, to meet their contractual obligations by eliminating the risks associated with upfront payments, as the funds are held in escrow as per the funding agreement between the parties.
In conclusion, what businesses require today is a partner that simplifies transactional processes in a manner that is seamless, efficient, and cost-effective. Together, TradeSafe and Standard Bank have embedded a strategic partnership that benefits organisations and the changing needs of their client-base.