In my yesterday’s article I promised to lay more emphasis on escrow service today, now In a bid to keep to my promise, today’s article will be discussing what an escrow service is, the benefits of escrow service, and 7 escrow services you can use in Nigeria.
Escrow is a contractual agreement in which a third party (the stakeholder or escrow agents) temporarily receives and holds money or property until a particular condition has been met (such as the fulfillment of a purchase agreement), with the disbursement dependent on conditions agreed to by the transacting parties.
The American Bar Association defines Escrow as ‘any arrangement whereby an item of value is delivered to a third party for safekeeping pending completion of some contingency or condition.’
To break it further down we can say
An escrow service is a contract between two parties that states that a third party will hold onto an asset until certain conditions have been met. When these conditions are satisfied, the asset is released to the receiving party (or parties).
Here is how it works:
Say you are buying an item from someone you’ve never met before and do not trust enough to send the money directly to; then you can use an escrow service that makes sure that both parties are satisfied with the transaction before releasing funds.
As soon as both parties agree on a deal, they sign up with an escrow service, which holds onto the buyer’s payment until they receive confirmation that the delivery has been made and accepted by the buyer. The escrow service will then release the payment to the seller, minus any additional charges.
For example, if A wants to buy B’s house, they might use an escrow service to ensure that the money is safely held until the house has been transferred to A. with A confirming his specifications with B’s advertised features.
There are two types of escrow: commercial and residential.
Residential Escrows: This type of escrow is used in real estate transactions when purchasing a home or property. It is usually opened at the beginning of the transaction to ensure that both parties fulfill their obligations. The funds are held by the escrow agent till both parties agree and consent to the terms of sale before it is released.
Commercial Escrows: This type of escrow is based on business transactions that require buying and selling of goods or services either online or offline. It is also opened at the beginning of the transaction to ensure that both parties fulfill their obligations. The funds will be held by the escrow agent till both parties agree and consent to the terms of sale before it is released.
Benefits of Using Escrow Service
The main benefit of using an escrow service is security. Without an escrow service, there’s no guarantee that either party will follow through on their side of the deal—the seller could sell the house to someone else without giving A refund, and A could back out of paying for the house without giving B anything. With an escrow service involved, however, if one party fails to meet their obligations then there are legal ramifications in place.
- Protection for both parties: This is one major benefit of using an escrow service, it protects both parties involved in the transaction; it gives you the freedom to transact without fear of losing your money or getting fake products/services.
- It saves you time: You don’t have to wait so long collecting payment from your clients before sending them their goods/services, with an escrow account you get paid first, and then you send/deliver your goods/services to them, this makes things easier for both parties involved.
- It helps your business grow: One way to make more sales as a vendor is to make use of escrow services, most people are afraid to pay before they receive what they purchased, but with the help of escrow service you can guarantee your potential customers not only in words but also in action.
- There is no need for trust between transacting parties: Nowadays trust is hard to come by, but with escrow service, you don’t have to trust your vendor or buyer all you have to do is set up an escrow account.
- It helps to lower the cost of the transaction because both parties have more confidence in each other when they know their money or property for sale is safe in an agent’s custody till the end of a transaction
- Monitors performance of agreements when it comes to timing/deadlines
- Access to multiple forms of payments: Escrow services offer multiple forms of payments for sellers, from credit cards to bank transfers; sellers can accept payments from buyers without holding a merchant account.
- Increased business and trading opportunities: Escrow service helps to attract buyers who otherwise may be wary of conducting business with strangers.
Ps: Escrow services are third-party contractors, whose trustworthiness should be assessed the same, escrow services are not fraud-prone and have been subject to fraud. The internet crime complaint center warns that fraudsters are setting up phony escrow sites which mirror true escrow services and accept funds or goods under false pretenses. Fraud is not unique to escrow services of course but buyers and sellers should conduct a proper investigation into any service to prevent fraud.
Nevertheless here are 7 Escrow services you can use in Nigeria
- Vericash is one of the best escrow payment solutions in Nigeria. It secures transactions in escrow anywhere in the world, Ensuring Payment Security for the digital economy. its flexible escrow technology ensures that transactional contracts are always fulfilled and payments are secure.
Provides solutions for
- Remittances
For international money transfer, funds exchange, etc. Vesicash is mitigating risk for all parties.
- Mergers & Acquisitions
For M&A transactions, Vesicash facilitates the process by introducing transparency for all stakeholders.
- Brokerage (3rd Party Managed Escrow)
Hold and manage client monies in a single, transparent, central, safeguarded transactional account on behalf of clients and stakeholders. Ideal for Lawyers and other Brokers.
- Venture Financing
Hold funds in escrow until targets have been met fostering mutual trust between Investors and Entrepreneurs.
- Marketplaces & E-Commerce
Our escrow technology enables platform owners to foster user loyalty by leveraging the payment security that escrow generates.
- Banks
Our fully customizable payment security technology is adaptable for various banking needs, ranging from retail banking to high-value international trade.
- Instant Escrow
Create an escrow transaction in minutes, without signing up. Through instant boarding, pay into a transactional escrow account in just 3 easy steps.
- Trizact
Receive escrow payments via your unique payment link. Popular with merchants who do business on Instagram, Twitter, Facebook, and Freelancers.
Click here to visit the site.
- Vahlid is an escrow payment solution that gets you protected from online and offline scams. Vahlid guarantees payment commitment from your customers and gives you 100% assurance that funds have been received, secured, and waiting to be disbursed once your product or service delivery is successful. You can safely buy and sell goods with this payment solution without any risk.
Provides solutions for;
- Real Estate
Vahlid provides a safe and secure platform for you to make payments for your real estate deals.
- Milestones
Vahlid offers the opportunity to pay for goods and services in phases.
- Vehicles
Buying or selling cars of any amount is made easy when you use Vahlid for your payments.
- Services
Service providers are often caught in the middle of bad situations when their benefactors refuse to pay the agreed cost, and this shortchanges their income stream.
- Jewelry and Fashion
Use vahlid to buy or sell jewelry, fashion items, and expensive gadgets thereby ensuring you don’t fall victim to fraudulent pieces or scams.
- General Merchandise
Whether you are online shopping for or selling lovely shoes, phones, a car, a house, or closing a big-money deal, Vahlid’s escrow ensures your payment is safe and secured.
Click here to visit the site
- Atara pay is a web and mobile tool used by sellers and buyers for protection during any online or offline commercial transaction through funds held in escrow by a trusted third party. All funds paid into this escrow are insured by Consolidated Hallmark Insurance PLC
Provides service for;
- Business to Consumer (B2C)
- Ecommerce Websites & Markets
- Person to Person P2P
- Service Industry Professionals
- Business to Business (B2B)
Click here to visit the pricing page
Read also: Instagram Shopping Scam: Statistics and How to Avoid Getting Scammed
- Trade assurer With TradeAssurer.com you can buy and sell Anything, and employ anyone’s service Safely without the risk of losing your money, worrying about trust, fraud, or breach of the agreement.
Provides service for;
A. All Merchandise Transactions
- Buyer & Seller Agrees on Items to be purchased.
- Buyer Pays Tradeassurer.com
- Seller Ships the Goods
- Buyer Inspects, Approves & confirms receipt of the goods.
- Tradeassurer.com pays the Seller
B. Vehicles
- Buyer & Seller Agrees on Vehicle to be purchased.
- Buyer Pays Tradeassurer.com
- Seller Ships the Vehicle
- The buyer Inspects and Approves the goods.
- Tradeassurer.com pays the Seller
C. Services on the Go with Milestone Payment
“Create a contractual agreement and list as many terms for the contract as needed. If the counterparty is satisfied and sure to meet up with the terms of service, a contract can be accepted, else rejected.”
- Buyer & Seller Agrees on a Job Duration
- Buyer Pays Tradeassurer.com
- Seller Provides The Service
- Buyer Approves the Milestone.
- Tradeassurer.com pays the Seller
Click here to visit the site.
- Middletrust gives you the power you need to build a risk-free payment structure that your customers can trust. Suitable for online marketplaces, e-commerce shops, and much more
With this Escrow payment solution You Collect and secure payments on your app or website, Make instant withdrawals, Access all your transactions and customer data, Collect service charges by utilizing split payments
Provides service for;
- Good and services escrow:
- Loan escrow
- Cryptocurrency Escrow
- Vehicle Escrow
- Real Estate Escrow
- Vault Escrow
- Enterprise-Grade Escrow
- Domain name Escrow
- Payroll Escrow
Click here to visit the site.
- Payscrow is an independent escrow service provider working with CBN licensed Deposit Money Banks and payment processors to ensure both buyers and sellers are happy with their transactions.
Provides services for;
PayScrow for Sellers
- Boost your sales, increase your conversion rate
- Guaranteed upfront commitment from buyers
- Reduces rate of abandoned orders
- Saves logistics cost
- Eliminates the risks of Pay/Cash-on-delivery
- Proof of delivery
- Easy integration
- Merchant dashboard for monitoring transactions
- Real-time notifications
Payscrow for Buyers
- Stay in control of your orders
- Secure escrow payment
- Eliminate payment scam/fraud
- Ensure seller’s commitment to quality and specs
- Seller’s commitment to delivery timeframe
- No deliveries, wrong or damaged products, no payments
- Transaction tracking dashboard
- Quick and easy refunds if terms are not met
- Real-time notifications
PayScrow for Social Commerce
- Address customers’ payment method concerns by offering an escrow option
- Get customer commitment before you make a delivery move
- Eliminate the risks of Pay/Cash on delivery
- Reduces the rate of phony or abandoned orders
- Reach a wider market, close more sales
Click here to visit the site.
- EscrowLock is an e-commerce platform that is popular for its intermediary service, in which it receives and secures payment from a buyer, and then releases it to the seller when the buyer has received the transacted goods or services in pre-agreed condition. Starting a transaction on EscrowLock is free. You shouldn’t have to pay any fees when nothing has been done. That way, even if you start a transaction and decide to change your mind later about it, you don’t lose any money.
Provide service for;
- Buyers
If you ever get to buy anything online, be it an item or a service, then EscrowLock is for you. You should never risk losing your hard-earned money to fraudsters who pose as genuine sellers online.
- Sellers
If you sell physical goods or services online, be it through Facebook, Instagram, WhatsApp, or via other websites, you should always use EscrowLock to receive your payments in order to protect you from unserious or even fraudulent buyers.
Our services apply to both individuals and registered businesses.
- Others
This group includes consultants, contractors, and other categories of people that may not necessarily be seen as buyers or sellers in the traditional sense.
You can use EscrowLock to carry out just about any legitimate transaction.
Click here to visit the site
Please note that these Escrow payment solutions are automated, all transactions are performed online, and all you’ve to do is pick any of these solutions and visit their website for more information about them.
Conclusion
Sometimes in business, a person or party can’t physically hand over an object in exchange for responsibility for it. If it’s too expensive, if it’s fragile and you fear damage to the object during transit, or if you are worried about someone (like a supplier) taking your payment and running off, then an escrow is probably the way to go. Escrow ensures that your money will not be released to the seller until he/she sends over your property. This prevents being scammed by the seller who may take advantage of you in a simple transaction. If there are issues with your purchase during the transaction, escrow can involve both parties in sorting out the disagreements and ensuring resolution.
However, if you do want to use an escrow service, we highly recommend that you do not just choose a few random services from the search engine results. Instead, we advise you choose from one of these escrow service providers primarily based on their reputation and experience. Look at their testimonials, their long-time positive ratings, and comments, you can possibly even contact them and ask them some questions about their experience with using escrow.
I think the world has seen enough of these (online and offline) fraudsters scamming people of their hard-earned money thereby disrupting Ecommerce diminishing trust between retailers and online shoppers, and I think it’s the right time we transition into a more secure payment solution at least for transactions between two parties that are anonymous to each other. I am not saying escrow services are flawless—no system will be foolproof—but they do make sure buyer and seller aren’t playing with fire. And if everyone is properly protected, then a little price difference shouldn’t be so bad, right? Yes.
It is our responsibility to create a healthy shopping environment where no one will be defrauded.
Regards!
Remember I’m rooting for you, my friend!
