Escrow accounts
Use custodial or escrow accounts to provide the security you need
Escrow accounts are a payment system in which funds are deposited into a bank account at a financial institution. Until certain agreed conditions are met, funds are not released to the appropriate recipient(s)
Benefits of escrow accounts
Management of third-party funds
Channels third-party funds by holding the funds in safekeeping before paying creditors
Centralisation
Unify your transactions in a custodial account and consolidate split payment settlements
Security
Release funds only when preset conditions have been met
Secure your transactions
Thanks to the security offered by these accounts, you reduce payment defaults and breaches of contract
Frequently Asked Questions (FAQs)
Escrow accounts, also known as fiduciary or escrow accounts, are a mechanism used in transactions to ensure that the payment reaches the seller and that the item or service is delivered to the buyer without involving any third-party fund management.
In an online payment through an escrow account, the money reaches the escrow account first (not the merchant’s account) and once the specified conditions have been met, those funds are settled in the merchant’s account. If the specified conditions have not been met, the funds are returned to the payer’s account.
The use of escrow accounts facilitates and secures transactions among the different parties, as the funds are withheld in them. Some of the benefits of using escrow accounts are:
- Safety and trust: Escrow accounts provide an additional level of security for both the buyer and the seller. The buyer knows that their money is protected until they receive the product or service as agreed. The seller has peace of mind that the payment has already been made before delivering the item or service.
- Business transactions: In real estate sales, escrow accounts ensure that the buyer’s money is kept safe until the transfer of ownership is completed. In the realm of international business, escrow accounts can help bridge time zone differences and ensure payments and deliveries go smoothly.
- Fraud protection: Escrow accounts minimise the risk of scams and fraud, as the escrow agent verifies that the conditions have been met before releasing the funds. This is especially useful in sales between strangers, such as those that take place on e-commerce platforms or classified ads.
In short, if you want to make secure transactions and protect the interests of both parties, it’s of interest to you to consider using these accounts. Make sure you understand the specific terms and conditions before using this service.
You can offer payments through escrow accounts in your company thanks to Wannme. Get in touch with our team to find out all the details.
Escrow, also known as escrow or fiduciary account, is a contract between two parties in which an asset (usually money) is deposited into the custody of a bona fide third party. This third party is responsible for ensuring compliance with the contract and ensuring that both parties comply with their obligations.
