Overview

What is an escrow account?

In various transactions such as real estate purchases, business deals, alternate investments, and online sales/marketplaces, people commonly use escrow accounts to protect both parties from potential fraud or misunderstandings.

In simple words, an escrow account is a secure financial arrangement where a third party, known as the escrow agent, holds funds or assets on behalf of the two parties involved in a transaction. The role of the escrow agent is to ensure the fair completion of the transaction according to the terms agreed and then release the funds or assets.

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Empower your business with OneEscrow

We offer an escrow solution that acts as a one-stop solution for merchants who need an escrow account to collect, hold, and disburse funds according to their specific use case.

• Easily open your escrow account with leading banks

Partner with any major bank to open your escrow account. We support all major financial institutions, and our SEBI-registered trustees oversee the entire process to ensure your account functions smoothly and securely.

• Virtual account management

Easily create, manage, and monitor your virtual accounts through our advanced APIs and intuitive dashboard.

• All-in-one dashboard

Easily handle all credit and debit transactions from our powerful dashboard. Experience an unparalleled control from a single place.

• Secure transactions

We securely hold all funds or assets until all conditions of the transaction are met. You benefit from advanced encryption and fraud protection protocols that safeguard your funds and personal information.

• 24/7 customer support

Reach out to our dedicated support team anytime for assistance and inquiries. We strive to provide guidance and answer any questions you may have throughout the process.

With Cashfree Payments’ OneEscrow, you can trust that we handle your transactions with the utmost care and professionalism. Explore our escrow solutions and experience a new level of security and convenience in your transactions.

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Use cases of Escrow

Escrow services provide a secure and reliable mechanism for various types of transactions. Here is how different industries use escrow in different scenarios:

• Marketplaces

In online marketplaces, escrow accounts facilitate trust between buyers and sellers. When a buyer makes a purchase, the system holds the funds in escrow until the buyer confirms receipt and satisfaction with the product. This process ensures that sellers receive payment only after they fulfil their obligations, while buyers can be confident that their payment remains secure until they receive the item as described. This reduces the risk of fraud and disputes and enhances overall transaction security.

• Co-Lending

In co-lending arrangements, multiple lenders collaborate to fund a single loan. Escrow accounts manage and distribute funds efficiently among all participating lenders and the borrower. The escrow account holds the loan funds until all co-lenders commit their shares. The escrow agent authorises the release of the funds when the terms are met.

• P2P Lending

Peer-to-peer (P2) lending platforms use escrow accounts to manage funds between individual lenders and borrowers. When a lender funds a loan request, the escrow account holds the money until the borrower meets the necessary conditions, such as providing collateral or completing verification checks. This process ensures the security of the lender’s funds, and the escrow account disburses them only after the borrower satisfy all conditions. Borrowers benefit from a streamlined and transparent borrowing process.

• Alternate investments

Supply chain financing: Escrow accounts facilitate supply chain financing by securely managing payments between buyers, suppliers, and financial institutions. The system holds the funds in an escrow account until the supplier delivers the goods or services to ensure that all parties meet their contractual obligations. This streamlines the supply chain process and reduces the risk of non-payment or delivery issues.

Invoice discounting: Invoice discounting allows business, that need quick access to cash, to sell their receivables to a third party at a discount. Escrow accounts hold the discounted invoice amount until the third party pays the invoice This provides liquidity to businesses and ensures the secure handling of the invoice payment.

• Gaming

In the gaming industry, escrow accounts manage transactions for in-game purchases, virtual currency, and rewards. When players win, the system pays out rewards to them from the escrow account.

• Payouts

Vendor/Supplier payouts: Businesses use escrow accounts to manage payments to vendors and suppliers. The escrow account holds funds until the vendor delivers goods or services as specified in the contract. This arrangement ensures that suppliers receive payment promptly once they fulfil their obligations. It also protects buyers from potential non-performance or disputes. It streamlines the payment process and builds trust between businesses and their suppliers.

By leveraging escrow accounts in these diverse scenarios, parties involved in transactions benefit from enhanced security, transparency, and trust. Whether they manage marketplace transactions, co-lending arrangements, or utility payments, our escrow services offer a reliable solution to meet their needs.

For more information or to get started with OneEscrow, fill out the Support Form.