Castler Escrow

Escrow: A Powerful Way to Secure Your Money

Imagine a payment scenario where the interests of all parties are served equally. While escrows have normally been a commercial bank service, the global digitization wave is steadily making escrows accessible to all.

The utilization of escrow ensures that any given transaction is secure as escrows are agreement-based accounts. A neutral third party transaction mediator is appointed to ensure fairness and security. This party (a company like Castler) guarantees that every transaction is fulfilled according to the terms and conditions formed by the transacting parties mutually. This means that parties can ensure that their interests are protected through a transparently formed and signed agreement.

Escrow as a "Trust-Enabler"

Escrow can be used in a multitude of business scenarios, ranging from small transactions of a few hundred Indian Rupees to huge exchanges worth crores. Being a versatile payment solution makes escrow the ideal method for carrying out business transactions. In addition to this, escrows are a true definition of a “trust-enabler”. Imbibing trust amongst different parties allows one to plan and initiate high stakes, high value actions. Confidence always helps one achieve great things. And needless to say, in a world where anxiety and stress has almost no mitigation, this is one problem we all can do less with.

The Escrow Process

To illustrate the utility of escrow, we can consider a relatable scenario – when an individual purchases/sells a home, the addition of an escrow account creates an element of trust between the two parties. This happens due to the presence of a neutral third party that spectates the result of the arrangement and disburses the funds when the transaction has been completed (according to the terms set by the parties). Digital escrow providers take this a step further. Castler, for instance, has partnered with certified trusteeship companies for enhanced security. The trustees authorise each transfer and every payout, thus adding an extra layer of safety and verification to each transaction. Possibilities of frauds, defaults, and transaction errors are therefore eliminated. Un-negotiably eliminated.

Versatility and Ease

Another key element of escrow systems is that today they can be used for online transactions. As with most banking and non-banking functions, the escrow process has been digitised. This offers much convenience to users. In addition to this, online transactions are more often than not carried out with parties you do not know too well. The tech wave has enabled people to know each other ephemerally – who even visits an offline store these days? At the same time, it can be very difficult to trust a random person online (and to fulfil their obligations). Yet again, the trust-enabling characteristic of escrow comes into play to facilitate transactions digitally across a variety of use-cases and industries – real estate, lending, cash-flow collections, mergers, acquisitions, PPI escrow accounts, marketplace transactions, revenue-sharing, logistics, TRA accounts – anything and everything.

No Third-Party?

Although escrow is thought of to only consist of a third party in order to follow through with a transaction, there are other ways that allow for direct business to be conducted – an escrow without a neutral third party. Mind you, these alternatives to third parties are still a part of the escrow system and surprisingly not that hard to use. Virie is an example of the first blockchain-based escrow site that does not require a third party for neutral transactions. It does not take much time and/or effort to understand the payment processes, even if they’re based off of blockchain technology. This fascinating method of an absent third party is also un-hackable and cannot be shut down – in fact, the transactions cannot be modified even by the creators of the company.
There is a gamut of secure, direct transactions that you and/or your business can dive into for more transparent and accountable payment processes. Whether escrow can be utilised through a third party or not, it does not take away from the truth escrows are powerful due to the safety in transactions that they guarantee. They should be adopted for transactions when possible, albeit whether the transaction is online or offline.

Comment your thoughts down below and share with us what you think! You can also mention any particular fintech topics you would like us to cover in our upcoming blogs.

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