Top 5 Escrow Payment Solutions For Your Online Marketplace
This article is for those who are building a Marketplace Website and need help choosing an Escrow service for their project.
Learn How To Buy
If you are like most of the founders we talk to, you are probably here because you want to know how to build a secure marketplace so your clients would have a secure buying experience on your website. Well, you’ve come to the right place. The secret to safe purchases is getting an Escrow service.
But what’s an Escrow service, you might ask. How does it work?
To put it bluntly, when there’s an Escrow, your buyers will not pay the sellers directly. Instead, the buyers will pay the Escrow service, who will hold the money until they get the product. Once the client makes sure that the product is what they’ve ordered, the Escrow service finally hands over the payment to the seller. What’s the end result? A fair and safe transaction for everybody.
The Good, the Bad and the Ugly
Now that we’ve established what’s an Escrow, let’s move to the providers. There are a lot of Escrow service providers on the escrow market, who offer escrow solutions for different kinds of transactions out there. To make sure that you’re going to pick the company that fits your business best, we took all the bulky information and organized it in a table so you can understand the Escrow marketplace better.
Tens of dollars
Tens and hundreds of dollars
Thousands and millions of dollars
What is being sold
Products & Services
Negotiable market based price (market price)
ACH, check, wire
Length of sales process
Hours to days
Days to weeks
Days to months
Number of decision -makers involved
One or two
One or two
Several people to a dozen or more
Buying process complexity
Usually 4 steps: contract, deposit funds, deliver service or goods, release funds
Usually 4 steps or more: hire, deposit funds, deliver services, release funds
Usually 7 or more steps: proposal, negotiation, contract, deposit funds, shipping, acceptance, release funds
Motivation for purchase
Individual needs or emotions
Individual needs or emotions
Buying process for provider to use marketplace
More multiple step
Goal task of a marketplace
-present the good/service
-present own solution and UVP
-create a community of customers
-show a great variety of goods/services
-present the brands
-create condition for competition (more comfortable, reliable, faster)
-suggest a solution for business
-sell the big players
-be the first in own niche
Public flea markets, private services
Retailers (goods or services)
Supply chain, wholesalers, service
Feeling overwhelmed? No worries, we’re here to help. To choose your Escrow provider for your online marketplace, try finding the answers to these 12 questions and based on your answers, you’ll know exactly what the Escrow provider is offering, and along the way, you’ll also figure out what you want from them as well.
- Is there support for marketplaces? (the escrow has to support transactions that include 3 parties: the Buyer, the Seller, and the Marketplace)
- What is their target market?
- Are there any extra fees to settle payments in different countries?
- What are the currencies that they accept?
- What payment types do they accept? (Credit Cards, Check, ACH, Wire, PayPal)
- What is their fee structure?
- Who pays the escrow fees?
- Who pays the Marketplace fees, the Buyer, or the Seller?
- Is it complicated to open an escrow account as a buyer? – What KYC (Know Your Customer) documents do they require? Do your clients have to upload identity documents? Or go through an identification process?
- Do they have an API? – because you will certainly need to add extra features and integrations in the future.
- Does the Escrow service support your platform? If you are using WooCommerce, is there a plugin that would integrate out of the box with your Escrow? Similarly, for Magento, Drupal, is there a module or extension that would allow you to take Escrow payments out of the box?
- Fund disbursement – how does it work and how often will the escrow pay the seller?
I’ve Done My Homework. Now what?
You have a lot of information on your hands, don’t you? You’ve learned the terms, you memorized the definition, you could practically tell me what an Escrow service is by heart by now. But just because you have the information doesn’t mean you understand it.
When I was in highschool, I could tell you the definition of electromagnetism, but that doesn’t mean I understood how electromagnetism worked. So maybe you’re like me. You theoretically know what you’re supposed to do, but practically? You might be a bit confused.
But we got your back. We got here 5 companies that offer Escrow services and we’re going to tell you a bit about them, so you know what to expect.
If you decide to visit Escrow.com, then you’ll see that the company is vouching a low-cost solution, simplified sales processes, reduced risk, protection for both parties and suitable for a wide range of goods. Some other benefits include, but are not limited to:
- support for very large payments (can take payments of hundreds of thousands of dollars)
- wide array of payment options
- offer support for WordPress through their dedicated plugin (works out of the box with WooCommerce and it also features specific integration with WCVendorsPro plugin)
- can be easily customized to add support for Dokan (contact us if you are using Dokan and need help with that)
And because we love having reviews to back us up, Escrow.com seems to have a whooping score of 4.3 out of 5 on TrustPilot.
MangoPay prides itself with white-label solution and adaptive workflow, fast user verification, Ibanised e-wallets, 10 currencies and many payment methods, open-source SDKs, and global payouts. But like Escrow.com, MangoPay also offers:
- a plugin that can turn a WordPress platform into a full-featured e-commerce platform
- a plugin that can turn an e-commerce platform into a multi-vendor marketplace
It’s rating on TrustPilot is 4.2, placing it right after Escrow.com (competition is tight, it seems).
Partnering up with Visa, this company puts a lot of price on security. How does it make sure that nobody is going to attempt fraus? Well, it performs thorough security checks to ensure the security of all parties involved in the transaction. Review-wise, things aren’t looking good for ShieldPay, having a score of 3.1 on TrustPilot. (but to be fair, there aren’t so many reviews either).
StripeConnect allows you to customize your onboarding process, being able to set payout timing, process complex money movement and get integrated financial reporting. Stripe has the best and the simplest API and with their Connect feature, you can add an Escrow component for your online marketplace. They also support multiple escrow marketplace payment options.
The review on TrustPilot is 3.3, but it’s important to note that this is for Stripe as an entire company, not for their Escrow component only.
Now BrainTree doesn’t really escrow funds. What it does instead is that it holds the transaction funds until you go ahead and release them. Braintree also offers a plugin for WooCommerce and they pride themselves on taking different types of payments (Credit Cards, PayPal, PayPal Credit, Google Pay, ApplePay, Venmo, and Local Payments).
The review on this service is pretty low, having a rating of just 1.5, but as last time, the rating is representative for the entire company and not just the service.
Askademic Case Study – a Successful Educational Escrow Marketplace
Askademic.com is an online platform that connects teachers to students. It is an educational website that provides several services like homework help and online video courses for different disciplines.
Still Undecided? Reach out for help!
So, you have all this information and you’re still wondering which Escrow service you should choose for your company. Well, we don’t blame you! Truth is, we can spend days talking about pros and cons and why you should choose one instead of the other.
The best tip we can give is to take a look at your business’s needs when it comes to Escrow services and go from there. But even that can be confusing, especially if you’re just starting out. After all, this an important decision and choosing wrong might set your whole business up for failure.
Luckily, we can help you here. Not only do we have the knowledge, but we have experience in this field as you can see from the Escrow Marketplace Case Studies.
Did you get your answers from this article? Please share your thoughts in the comments below.
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