* Leading escrow service Escrow.com offers safer online transactions
As more and more businesses move online, the complexity of how we sell goods and services becomes more pressing. One of the biggest challenges is how to transfer something purchased online so that the payment is made only when the goods, as specified, are received and the funds are assured.
This transaction assurance is the province of escrow services, and now there are online services that can provide this for any transaction. The leading service is called, not surprisingly, Escrow.com and is the only escrow service recognized by eBay.
The way it works is straightforward: The buyer and seller agree on terms (length of inspection period, party responsible for paying the escrow fee, delivery options, shipping costs, and so on); then the buyer pays Escrow.com – the company accepts everything but cowry shells as payment; the seller ships the merchandise with tracking information; and Escrow.com verifies that Buyer receives the shipment is received. Within the agreed time period, the buyer either accepts or rejects the merchandise and the seller is paid accordingly.
The main business of Escrow.com has been the transfer of domain names and car sales, but obviously any goods or services that can have their transfer and acceptability criteria defined can be handled via escrow.
Escrow.com’s service fees are two-tiered: The Standard service can be as low as 0.89% of the merchandise value over $25,000 or as high as 3.25% for transactions up to $5,000.
The Premier service, which only supports transactions up to $5,000 also allows PayPal and credit card payment, additional buyer identification verification, additional fraud screening, and priority e-mail support, costs 0.63% of the merchandise value.
There are also additional costs for funds being sent by anything other than a check by mail.
Escrow.com’s challenge has been the flood of bogus escrow services such as Simple-Escrow.net and WhyEscrow.com that appeared and successfully defrauded a number of customers to the tune, it is estimated, of several million dollars (see this article). The Auction Guild has some useful advice on the topic of escrow fraud prevention.
