How escrow works
20th July, 2022
1 min, 57 secs read
How does an escrow work
In every business or transaction, there is always a risk. The risk of losing your money, getting scammed, or falling into the trap of fraudsters.
Is there a way to eliminate these risks? A way to prevent fraud in transactions? Is there a way to make secure payments that are risk-free? The good news is; Yes there is!
Escrow is the backbone of secure payments. Escrow is a long-standing form of payment in time past. Even from the time of trade by barter commerce system down to our present, escrow is just like a lawyer, a trusted intermediary that satisfies the interest of all parties of a transaction.
What Escrow does for you helps you carry out secure transactions without risks.
What is an Escrow?
An escrow is a formal agreement where two parties (a buyer and a seller) undergoing a transaction agree to keep money, or other valuable assets with a trusted neutral third party until the agreed terms between the seller and buyer are met before the money/assets are released to the receiving party.
In other words, Escrow is the middle man between two parties that do not trust each other, or that seek a guarantee of business transactions.
How does Escrow work?
An escrow is a neutral holding place for funds in a transaction between two or more parties.
There are 6 steps of an escrow process;
- First, the buyer and seller create an escrow account with a reputable escrow service provider such as pandascrow.
- The seller creates a transaction with clearly defined terms of the agreement and shares a unique payment link with the buyer.
- The buyer accepts the terms and deposits the agreed sum with the third party in escrow, using the generated payment link.
- The third-party escrow service provider then sends a confirmation to the seller, and the seller proceeds to provide the product/service to meet the specifications and requirements of the buyer. These products could be electrical appliances, lands, crypto, furniture, wigs, or digital products like eBooks, NFTs, etc. Or they may be service-based such as web design, graphics, voice-overs, tutoring services, or housekeeping.
- When the buyer receives the product/service and has confirmed that it meets all the terms in the agreement, the buyer sends a confirmation with Pandascrow that they have received the product/service.
- The escrow service provider (Pandascrow) then releases the money held in its safe straight to the seller's preferred account.
Escrow systems aim to ensure everyone walks home happy and satisfied with the transaction. Find out how escrow provided by pandascrow is protecting individuals and businesses like yours in online and offline transactions and Why you need Escrow — Pandascrow.