Escrow is a service provided by a neutral third party that temporarily holds the transaction amount instead of transferring it directly from the buyer to the seller. The funds are released to the seller only after the buyer confirms that they have received the product or service and that it meets the agreed terms.
With Waffy, Waffy acts as the neutral third party. Waffy is not a party to the sale or purchase itself. Instead, it holds the funds in a separate escrow account until the agreed transaction conditions are met.
Why Do You Need Escrow?
When two parties who do not know each other transact directly:
- The buyer may worry about paying upfront without receiving the product, or receiving a product that does not match what was agreed.
- The seller may worry about delivering the product or completing the service without receiving payment.
Escrow helps address these concerns by:
- Protecting payments: The funds are not released to the seller until the buyer confirms receipt and is satisfied with the product or service.
- Reducing fraud: Waffy verifies the identity of the parties before a transaction begins.
- Reducing disputes: Clear transaction terms recorded from the start help prevent misunderstandings. If a dispute does arise, Waffy provides a defined escalation and review process.
- Keeping transactions on schedule: The transaction includes a clear execution period and a defined inspection period, giving the buyer time to inspect the product before the funds are released.
When Should You Use Escrow?
People use escrow services for online transactions, especially high-value deals or transactions where it is difficult to verify the product or service immediately. Examples include electronics, vehicle license plates, freelance projects, digital products, property rentals, tickets and bookings, gaming transactions, and valuable collectibles.