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    1. j-tex is offline

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      #1

      What are escrow payments - Explanation of escrow as a payment method

      Hi,

      Sorry to be dense, but what exactly is escrow payments and how does it work?

      I take payments from customers through bank transfer, but would like to offer them other options.
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      #2
      Hi J-tex,

      Welcome to Wholesale Forum

      An escrow payment is a payment where an independent trusted third party receives and disburses money for two or more transacting parties. With an escrow payment, funds from the transaction aren't released to the seller until goods are received by the buyer or buyers. Escrow protects both buyers and sellers against the potential risks of fraud.

      Escrow payments are used mostly for B2B business transactions and the payment takes place in a number of steps:
      • Step 1: First the buyer and seller agree on the terms for the transaction; description of the goods, price, number of days allowed for inspection, shipping info etc.

      • Step 2: The buyer pays to an escrow service, often online based, and the payment is verified by the escrow service to the seller.

      • Step 3: Once the payment has been verified, the seller ships the merchandise to the buyer. The seller submits tracking information and the escrow service will verify the receipt of the shipment.

      • Step 4: The buyer then accepts the merchandise within the agreed upon time frame.

      • Step 5: Once the buyer has accepted the merchandise, the funds are released to the seller.
      Payment gateways like PayPal are a form of escrow, although not as secure as purely escrow services like escrow.com; PayPal holds a merchant's funds, especially for new merchants, for a set period of time in case issues arise with the merchant's transactions. PayPal then has the power to return the transaction to the buyer if there are reasons to believe that the merchant has not fulfilled its duties. PayPal's Buyers Protection and Sellers Protection policies outline how PayPal moderates disputes.

      There are many escrow services online, some of them more reliable than others, whereas some are outright scams or are simply unreliable when disputes arise. Make sure you investigate an escrow service thoroughly before using it to protect your money.

      If you are interesting in offering escrow as a payment option on your website, you can read more about researching payment gateways at the following threads:Hope this helps
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