What is Escrow and why do I need it?
The digital payment platform has seen a considerable leap in the recent years. The events of the recent past such as demonetization, digitization of banks and transactions and the introduction of affordable mobile phones has equipped almost every individual with the means of using digital payment methods. Even when the Covid-19 pandemic crippled the world and going to the banks became a potential health risk, people resorted to using digital payment methods and online banking in order to continue their businesses or their day to day purchases. Not just these, but the sheer convenience of digital payments has found a wide customer base which continues to increaseevery day.
As a result, almost every individual, right from the people handling large businesses to people buying every day stuff at a shop or online, have started using digital payment methods. In fact, technology has slowly managed to reach the people at the grass root level such as the farmers and local vendors enabling them to opt for cashless transactions and use digital payment methods.
With almost everyone using the digital payment method, the amount of money being transacted online is huge. Therefore, the use of such online transactions comes with a potential risk of cybercrimes and security breach. A number of hackers, fraudsters and cyber thieves are continuously on the lookout for some sort of fault or glitch with the digital apps which will give them a chance to infiltrate these systems. So, how do we ensure that are our online transactions are secure and protected from digital fraudsters? The answer is Escrow.
Escrow provides the benefit of secure payments not just to the buyer but also to the seller. Escrow uses a third party account to hold the money deposited by the buyer and transfers it to the seller only after ensuring that the buyer and received the material and is completely satisfied with. So basically funds are safe with a trusted third party until the transaction is complete. Escrow also helps in enabling trust between the customer and seller by temporarily holding the money and assuring both the seller and the customer that the money will go into the right hands in the event of a satisfactory transaction which fulfills all the terms and conditions mutually agreed on by both parties. Therefore using Escrow for online payments and transactions enables us to transact safely without the danger of falling prey to the frauds, cybercrimes and hackers.
Escrow has been traditionally used by corporates for secure business transactions and due to the benefit of security; it has expanded and is being used for all sorts or digital transactions. With time it has become digitized for convenience and ease of operation. Since online transactions have become an important part of our everyday lives, the use of Digital Escrow has become imperative in order to protect hard earned money from falling into the wrong hands. 65M SMEs today are trying to embrace payments technology and getting used to the benefits of escrow account.