What is an Escrow arrangement and how does it work?
Escrow Account is also referred to as Non-Regulated Accounts.
This trust involves three parties:
Trustee – Beneficiary – Merchant.
Trustee acts as an intermediary and works with both the Buyer and the Seller to hold the funds under a set of rules and conditions set out in the Escrow agreement which the three parties would sign
Escrow Agreement:
– a contract that defines a financial arrangement between two parties, where one party (client), Information pertaining to the deposit shall be provided to the Trustee company by the client.
-The funds are held in “trust” for the second party (Seller) for a given transaction or series of transactions between the two parties under a set of rules and conditions set out in the Escrow agreement signed by the three parties.
-All terms must be agreed between seller and buyer and any other party
Release of funds:
-The Seller then completes its responsibilities as agreed between the Buyer and the Seller. After performance the Buyer would advise the Trustee Company to release the relevant funds to the Seller. Due diligence is conducted as specified in the escrow agreement before releasing the funds. This process eliminates the risk of money loss or merchandise and any legal undertakings. Transactions can be made in all security, creating confidence in both buyers and sellers.
-Such an escrow arrangement can involve multiple transactions over a period of time.
-Premio Consultancy may engage the services of other experts, legal and professional advisors where it needs specialist advice to confirm performance or for further analysis of data. The use of such experts and their fees would be agreed in advance and form part of the overall cost of providing the service.
WHO USES ESCROW ACCOUNTS?
-Providers of concierge services, gift card & vouchers and event management.
-Merchant acquirer