Escrow is a payment service that is a tripartite agreement between the buyer, the seller, and the escrow provider that is beneficial for both the buyer and the seller involved in a transaction. The process involves keeping funds with a trusted and neutral third party responsible for releasing funds when the contractual obligations are fulfilled by both parties involved. A trusted escrow provider like Tazapay eliminates the risk for both the seller and the buyer.
What are the benefits of Escrow for small businesses?
Escrow accounts are particularly beneficial for small businesses to secure transactions that involve huge sums of money. For transactions that involve professional services, cross-border trade, procurement, supply chain, etc., small businesses can leverage the benefits of escrow payment providers to mitigate payment risks and grow seamlessly. They are backed by state-of-the-art security, keeping the funds safe and help two parties to transact securely and stress-free. Escrow account costs are reasonable and should be viewed as investments because small businesses can reap multiple benefits.
Benefit for the buyer
If a business is on the buying side, one can be assured that their money will be released only after the seller has fulfilled its side of the obligation like shipping the items etc. The buyer is further protected against any delays as the money is only released following the delivery timelines set in the escrow agreement that both parties mutually finalize. In case the received goods fail the inspection, the buyer’s money stays protected.
Benefit for the seller
Suppose the business is on the selling side. In that case, the seller can be secure about the intent and ability of the buyer to pay as the buyer funds the escrow account before the seller releases the items. Tazapay’s escrow service ensures that the seller only does business with buyers, verified by Tazapay, to avoid any post-shipment hassles. Moreover, Tazapay also provides a guarantee for each transaction, which is hugely beneficial to small businesses since they do not have huge working capital and cannot afford delayed payments.
Business verification and vetting
A few escrow service providers such as Tazapay offer online verification of the buyers and sellers involved in a transaction. The identity, compliance status, and detailed company reports are made readily available, which would otherwise cost a small business a lot of time, effort, and money. This KYC and identification process opens up new avenues for the seller to bring in more clients. It also enables buyers to deal with sellers while being secure as credentials are verified.
Mitigation of risks involved in cross border trade
International trade risks involved with cross-border trade payments such as payor risk, enforcement risk, and KYC risk are eliminated when using a trusted escrow service provider such as Tazapay.
Suitable for a range of goods and services
Escrow services are not limited to cross-border trade, it can be used across industry types and geographies. Be it jewellery, vehicles, mortgages, property transactions, or any type of service; an escrow account protects both parties regardless of the transaction value.
Ideal for fixed asset transactions
If one is investing in fixed assets such as a plant, machinery, vehicle, or other types of large investment, it is recommended that one uses an escrow service. Sizable transactions like purchasing equipment, white office goods, machinery require a large amount of cash and will have a longer processing time. These cash deposits are ideal for remaining protected in the escrow provider’s account until the transaction is finalized and comes through.
Dealing in real estate is a multifaceted process and involves copious amounts of time and money. Hence, small businesses should opt for an escrow service provider to better secure their transaction and ensure the fulfilment of the agreement.
Ensures safe and secure online transactions and transfers
Many small business owners choose escrow services to conduct online transactions and transfers, be it a high-value transaction or a small value transaction. If you have never met the person you are conducting business with, it is ideal for exercising caution and transacting securely and worry-free.