At a time when cyber frauds and online scams are on the rise globally and in India, Castler, a start-up that specialises in digital escrow solutions, has registered a significant jump in the number of transactions on its platform.
This assumes significance as a recent blog by global credit reporting agency major TransUnion stated that the percentage of suspected financial services digital fraud attempts increased 149 per cent globally in the first four months of 2021 when compared to the last four months of 2020.
In a separate report, the global agency further stated that "an analysis of global online fraud trends found that since the COVID-19 pandemic began, fraudsters are increasing their rate of digital schemes against businesses" while adding that its Global Consumer Pulse Study found that more than one in three global consumers have recently been targeted by digital fraud related to COVID-19.
Launched in January this year, the Delhi-based venture’s client base has grown by 53 per cent even as the value of active transactions neared the Rs 30 crore mark -- Rs 26 crore to be precise. Further, the average balance in its digital escrow accounts has jumped from Rs 3.71 lakh to Rs 8 crore with the gross transaction value rising from Rs 30 lakh to Rs 25 crore per month.
The venture has been registering an average of 6,000 transactions every month with the cumulative transaction value pegged at Rs 80 crore.
Escrow accounts are generally opened by entities that are entering into some kind of agreements and are used to park the money before it is transferred to the beneficiaries. The release of funds is typically linked to certain conditions or completion of the agreement terms.
While escrow accounts have been in use for years, the traditional approach has been plagued with cumbersome documentation, time-consuming process and also high fees in many cases.
Founded by Vineet Singh and Dinesh Kumar, Castler has digitised the escrow account ecosystem and has even tied up with leading banks -- including ICICI Bank -- and certified trusteeship firms. The start-up facilitates the transacting parties to get their KYC process done electronically before opening a digital escrow account. The funds are then transferred to the account that offers access control with features like SMSes and mail notifications.
“The Indian transaction environment is rapidly digitising, and payment processes are increasingly being taken online," said Singh.
"At the same time, cyber-criminals are also capitalising on loopholes in advancing payment technology. Every other day you hear about phishing scams, ATM frauds, and compromised e-payments, and it is no surprise that people find it difficult to trust online transacting methods. Digital escrows can help tackle this," he added.
Interestingly, the Indian start-up offers customised digital escrow solutions for various use cases like corporate restructuring, real estate transactions, deferred payments, digital lending, invoice discounting, business loans and normal consumer transactions as well.
The startup has already raised Rs 3.6 crore pre-seed funding from entities like Venture Catalysts, 9Unicorns, LetsVenture, AngelList, and PointOne Capital.
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