Last editedApr 20223 min read
An escrow service can help provide a more secure buying experience, from online marketplaces to ecommerce platforms. If you sell products or services online, you might be wondering if your business could benefit from internet escrow services. Here’s a closer look at the best escrow services today, their benefits, and how they compare to one another.
What does an escrow service do?
Escrow services act as a third-party middleman between a buyer and seller during any financial transaction. In the case of online marketplaces or ecommerce sales, the buyer pays the escrow service rather than directly transferring funds to the seller. The funds are put into anescrow account, licensed by the government, for safekeeping until the transaction has been officially settled and cleared.
Before funds are distributed to the seller from the escrow account, the buyer must confirm that the goods have been received and approved. After this approval, funds are released from theescrow account to the seller’s business account. The ultimate goal of internet escrow services is to provide an added layer of security to online transactions. Escrow accounts are also useful for transactions involving higher value items like yachts, electronics, fine art, property, and automobiles.
Buyers benefit from being able to inspect their purchase before funds are cleared.
Sellers benefit from receiving secure payment without chargeback fees.
Settlement times can take anywhere from 48 hours to several months depending on the complexity of the transaction. For big-ticket purchases like fine art and collectibles, it takes more time to verify authenticity and approve the funds.
The best escrow services in 2022
Not all UK escrow services are created alike. Some are offered through more traditional banking institutions, while others come with their own fintech platforms and integrations. Here are a few of the best on the market for 2022.
One of the top choices both within the UK and abroad, Escrow.com offers support for small payments as well as for large sums of money. It’s easy to integrate into WordPress websites with a dedicated plugin and is also compatible with a range of ecommerce platforms. Additional benefits include risk reduction, dual-party protection, and an array of payment options.
2. Barclays Corporate Escrow
Most of the options on this list apply to online or ecommerce businesses, but banks also provide more traditional escrow services for corporations. Barclays corporate escrow services give end-to-end support for a selection of transactions such as mergers and acquisitions, financing, pensions, and more. You can hold your funds in joint or single-party accounts, with agreements available in various regions. Businesses can open escrow accounts in London, Dublin, Dubai, or New York all with express onboarding available.
Transpact is a popular European escrow service that has been used by online buyers and sellers to make transactions more secure. It guarantees buyers receive the goods they were promised, while sellers receive the guarantee of full payment without the need to chase unpaid debts. It’s authorised and regulated by the FCA, with all funds protected according to the UK Payment Services Regulations of 2017.
Another online option to consider is ShieldPay, which is partnered with Visa and offers the same high level of security as card transactions. This includes built-in fraud protection, end-to-end encryption, and low fees. Customer support is also on hand to ensure that transactions run smoothly for both buyer and seller.
Like Escrow.com, MangoPay offers sellers a choice of plugins to integrate it right into existing websites. It can transform your WordPress site into an ecommerce platform or marketplace for multiple vendors. Benefits include the ability to accept multiple payment methods in multiple currencies, with global payouts on hand.
6. Stripe escrow service
You might already be familiar with Stripe as a payment processor, but this multifaceted service also offers escrow components as an add-on. The Stripe escrow service is called Stripe Connect and it enables users to move money across different channels and accounts with fully integrated financial reporting. A simple API makes it easy to integrate into your website or marketplace, with a variety of payment options to choose from.
To choose the best escrow service, you should think about what you need to use it for. Traditional providers like Barclays are best for corporate transactions, while more flexible options like Transpact apply to smaller scale transactions. In any case, look at fees, payment structures, and accountsecurity to find the best fit.
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