When you go shopping for products or services online, your transactions are prett straightforward – you look around, find what you need, add it to your cart and pay for it at the end of the process.
However, not all transactions on the internet are that simple. Sometimes you need to do a transaction, a value exchange not with a big company like Amazon, Fiverr, Microsoft or similar. Rather, you want to buy something from another person, an individual like you.
The problem here is – you never met this person, he might be living on the other side of the country or even globe. Plus, if there is one thing that internet doesn’t lack and never has, is scammers and fraudsters.
What to do in those situations?
Well, the magical word and a solution for such conundrums is – escrow.
An escrow is a financial arrangement in which a third party holds and regulates the payment of funds required for two parties involved in a given transaction. It helps make transactions more secure by keeping the money in a neutral account.
Funds that sit in escrow are paid out when all the terms of an agreement are fulfilled. Long time ago, an online auction marketplace you might have heard about – eBay, partnered with Escrow.com to offer escrow services and reduce fraudulent activities.
What You'll Learn
Escrow.com, Online Escrow Services
Escrow.com is a platform that was founded by an online freelancer marketplace Freelancer, in 1999.
The aim of the service was to provide very important escrow services, keeping the money of the buyer in safe place until he gives a nod that agreement terms are met, at affordable rates.
What can you safeguard with Escrow.com?
Escrow.com handles many kinds of purchases, mostly in online world such as: selling and buying web domains or websites, motor vehicles, contracted services, milestone transactions, jewelry, antiques, electronics, collectibles, and general merchandise. All parties of the agreement are required to verify themselves before transacting.
Escrow.com is actively partnering with big online platforms to make life easier for their users.
For example, they have a deal with Shopify to sell existing stores and several web hosting companies, for example, GoDaddy, to transfer domains.
How does Escrow Work?
Escrow.com handles all the technical details of a deal: it collects, holds, and distributes funds when buyers and sellers are satisfied with their dealings. Most escrow purchases are processed using five steps:
- Buyers and sellers must have accounts on Escrow.com and layout common terms of their arrangements. Either party can begin the sales process.
- The buyer sends funds to Escrow, Escrow verifies the validity of the payment, and the seller is notified about the payment. Payment options include wire transfers, credit card, money order, and PayPal.
- The seller delivers his product or service (either ships or transfers it) to the buyer, and the buyer confirms delivery.
- The buyer has a previously agreed number of days to check out the item and the option to accept or reject it.
- Once the buyer accepts the item as satisfactory, Escrow releases the money to the seller. If the buyer rejects the item, the process moves in reverse until the seller is back in possession of his good.
The best way to asses a transaction’s cost is to use Escrow’s fee calculator. Fees are listed for US dollars and euros and differ depending on the transaction amount, for example, a transaction involving more than $25,000 will start at 0.89 percent.
Here is an example of how valuable Escrow.com can be for people working online. Flipping websites or domains is a big industry these days. Good sites that earn money are bought and sold all around but mostly on private Facebook groups or forums. As you probably already guessed it, this is an ideal use case for Escrow.com.
Since the buyer and seller are often completely unknown to each other, there is no way one of them would trust the other and send him his money or website credentials without receiving the countervalue.
So here is the process how you would sell a website using escrow. Let’s assume you want to buy a website from someone.
- Step One
Create an account and clicked on “Start a New Transaction” and “Buy.”
Select the type of transaction and the role of the buyer.
Enter a title for the transaction, the seller’s email address and phone number, and other standard details. I
You can use Escrow’s “Concierge Service” that helps with transferring domains.
- Step Two
Send funds to Escrow via bank, card or PayPal and seller will be notified once your money arrives into Escrow wallet.
- Step Three
The seller needs to accept the terms and initiate the domain transfer.
- Step Four
Buyer needs to then confirm and accept the transaction, marking it all good for Escrow to release the funds to the seller.
- Step Five
The seller will collect his funds, and your transaction was completed.
There are some negative reviews about the platform online, mostly about their spotty and slow support. If the process runs smooth from the get-go and you don’t need the assistance of their support, Escrow is a well worth of using when you need such services.