Financial Data
Updated 20 Oct 2020

Online shopping made safer with Shepherd and Standard Bank

A surge in popularity for online shopping also comes with a surge in cyber crime.


04 September 2015  Share  0 comments  Print

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E-commerce stats from show that 40% of worldwide internet users have at some time or another bought products or goods online via desktop, mobile, tablet or other online devices.

This amounts to more than 1 billion online buyers, and this number is projected to grow steadily. In South Africa, the stats show a similar trend, with SABRIC reporting a surge in online shopping over the last few years. In fact, online shopping was worth about R59 billion in 2011‚ which equates to 2% of the economy and is expected to grow to about 2.5% by 2016. 

Related: Cyber-crime could cost SA business millions

While this growth rate is slower in comparison to some other countries, growth in South African broadband capabilities and access devices has made e-commerce increasingly more accessible. 

An increase in online crime and fraud

It’s no wonder that online shopping is so popular; for many it is a way of life. Those online acolytes prefer the experience as it’s fast, easy and convenient.

There are no supermarket queues at the end of a long work day, no crowded malls bursting with other impatient shoppers and, in most cases, you can receive delivery of your purchase straight to your door within a few days.

However, along with the surge in popularity of online shopping comes a surge in online crime and fraud. Indeed, South Africa is rated third in the world as a leading cybercrime hotspot, according to the Norton Cybercrime Report 2013.

Furthermore, a Columinate Survey that examined online banking trends between 2012 and 2014 found that 20% of online bankers had been victims of online fraud, while 62% had been targeted at some point between those two years.  

Shepherd – The first of its kind 

Enter Shepherd – South Africa’s first escrow service; a new, reliable system that has been launched to provide a secure and seamless online purchasing experience. Shepherd is powered by Standard Bank and is a partner of RAM Couriers.

The system holds payments for online purchases in a trust, delivers the goods from the seller to the prospective buyer, and only when all parties are satisfied that the terms of the deal have been met will the money be released to the seller, thus greatly reducing the risk of fraud and scams. 

According to Shepherd’s MD Martin Reynolds, the word escrow simply means ‘to hold in a trust’. 

“What makes Shepherd distinctive is that it has partnered with RAM Couriers to ensure that the buyer is satisfied with the item. This eliminates personal contact and makes the whole process much safer,” Reynolds explains.

“In South Africa, customers want a financial product for their online purchases that provides a simple payment security solution – an escrow service combined with courier delivery reduces the risk of fraud and ensures peace of mind throughout the process.” 

Eliminating the risk and growing your e-commerce business

According to Craig Polkinghorne, Head of Business and Commercial Banking at Standard Bank, this not only eliminates a lot of the risks involved, but also opens up the market to buyers and sellers across the country: “There is no need to only deal locally anymore.”

Polkinghorne says that while e-commerce continues to grow in South Africa, the biggest concern for online shoppers remains the availability of secure payment platforms.

“At Standard Bank, we view safety and security as a top priority for our customers,” says Polkinghorne.

Related: The cost of cybercrime rockets

“We found it fitting to support Shepherd’s escrow service, as it aligns with Standard Bank’s commitment to constantly deliver safe and convenient banking platforms and solutions to our customers. Shepherd simply eliminates the payment risks associated with online shopping, enabling the buyer and seller to focus on completing the transaction.”

Preventing fraud and protecting you

 “Shepherd offers a unique solution to South African online buyers and sellers. It not only serves a protective role, but also prevents fraud in an environment where fraudulent activity leaves consumers wary of online buying.

"The platform is imperative to building trust between businesses and consumers. In so doing, it could prove to be the catalyst that shifts online economic activity in the country. Entrepreneurs now have a medium to build their online business channels, while the consumer will benefit from having a platform that mitigates the risk of doing business with unknown parties.”

Leading classified website Gumtree already offers Shepherd as an option for its customers to use in transactions, and Reynolds anticipates that other major ecommerce retailers will soon follow suit.

How Shepherd works

He outlines how the solution works: “Shepherd operates as a third party that facilitates transactions on behalf of sellers and buyers, and is offered as a purchasing option to customers of the leading classified websites. The process is extremely simple to follow.” 

  1. The customer registers to use the service on
  2. Either the buyer or seller can request to deal through Shepherd for the transaction. 
  3. After the seller initiates the transaction on Shepherd, the buyer makes a payment into a secure trust account held by Shepherd and Standard Bank.
  4. Shepherd secures the funds in the account until the buyer receives the item and accepts it.
  5. Shepherd facilitates the delivery of the goods through its partnership with RAM Couriers. The buyer simply signs the courier waybill to accept the   delivery if he/she is satisfied with the item. 
  6. Shepherd then releases the funds to the buyer. If the buyer isn’t satisfied, the item is returned to the seller and the buyer’s payment refunded.

A small transaction fee is charged for the service, but Johan Nel, Country Manager of Gumtree, believes the benefits of the service far outweigh the cost.

“It’s worth paying a nominal fee for added security – whether you are spending R150 000 or R1 000, you have peace of mind trading goods online, knowing that the funds and the deal are safe.”

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