What Is An Escrow Service?
An escrow service is a neutral third party that holds onto your money until you receive what you paid for. Without an escrow service, if you buy something online and the company or seller goes out of business before delivering on their end – then there’s no way to get your money back.
When would you use an Escrow Service?
- When you cannot physically inspect the item, e.g. A seller from upcountry selling used engines for vehicles.
- When you are not familiar with the seller, e.g. A new Facebook friend is selling items on Gumtree or Craigslist.
- When there is a large amount of money involved in the transaction, e.g. Buying an expensive motor vehicle that has to be shipped from another province or country.
Advantage of Using An Escrow Service
Escrow services are available in most major cities, and you can always find them online. Using an escrow service gives both the buyer and seller an extra layer of protection against fraud. If something goes wrong with your transaction – then at least there’s a safety net to help the two parties resolve their dispute fairly through mediation or arbitration.
Benefits Of Escrow Services For South African Businesses
Using an escrow company is essential if you’re buying high-priced items from out of town sellers because it also protects you against shipping damage by allowing only insured deliveries. Many people get burned when they buy things off Gumtree or similar sites because there isn’t any oversight for transactions between private individuals who don’t use business brokers.
However, the main advantage of using an escrow service is that it provides a way for buyers to protect their money if the seller goes out of business or doesn’t deliver on their end. Since you aren’t sending cash in the mail (or over other types of payment like Western Union), there’s no risk whatsoever that you’ll lose your money without receiving anything in return.
What Are The Disadvantages Of Escrow Services?
There are very few disadvantages when using an online escrow company – aside from paying them a fee every time they send you money through a wire transfer or another payment method. However, it’s an excellent deal since these companies make their living by offering protection against fraud and charge nothing unless you require their services.
The main disadvantage is that there might be additional costs associated with using an online escrow service. Still, these are minimal and well worth the price of protection against fraud or sudden company closures/bankruptcies. The most important thing to remember about any service like this is that they offer extra security for both parties, which means fewer disputes over whether you got your money back in time after cancelling payment on something if sellers don’t ship out items as promised.
How does It work To Use An Escrow Service For Online Transactions?
Using an escrow service doesn’t take much effort because these companies do everything automatically once you’ve signed up for their services online. You’ll need to give them the information of your transaction, and then they will do all of the work for you.
Sending money through an escrow service is easy – once you sign up for their services, which typically takes less than five minutes from start to finish. The company might ask a few questions about where you’re located or what type of items/services are being bought to understand better how much protection against fraud they should offer on your behalf.
After this process has been completed, however, everything else is just as simple as any other digital payment sent back and forth between private individuals without going through a regulated business brokerage firm like Bidorbuy. All transactions go directly from one party to the other – and the escrow company will only step in if you request their services.
Standard Procedure For Using An Escrow Service
Using an online escrow service is very easy because all of their forms are completed for you automatically when someone wants to use one of these companies on your behalf. When deciding which site or agency to work with, however, there are a few things that you should always keep in mind:
When making choices about what type of payment method works best for buying items from out-of-town sellers using an online escrow company, every contract must have clear terms regarding how long money can be held before either being released back into your account or sent directly through another channel like Western Union or other types of money transfers. This way, if there is some dispute between you and the seller, you can request that the money be sent back instead of having to wait for a certain amount of time before it’s released automatically.
We Recommend Trade Safe For Escrow Services in South Africa
The best online escrow company that we’ve used so far is Trade Safe, which offers one of the widest selections of payment methods to use when using its services. Their fees are low compared to other companies in this industry. They also offer flexible options for completing transactions if you run into any problems during your buying process.
How Tradesafe Fees Are Calculated
The minimum fee charged by Tradesafe will be R115.00 (including VAT), which is the lowest amount that anyone can expect to pay when using this company’s services for any online transaction involving their escrow service in South Africa. Their fees are then calculated based on the total value of your transaction.
The fee is always charged as a percentage, which will be added to the shipping cost if applicable (making it seem like you’re paying more than usual). The table below shows what type of percentages will be applied depending on how much money is sent in an escrow transaction.
*The minimum fee charged by Tradesafe will be R115.00 (including VAT). These fees are subject to change without any prior notice from the company.*
Using an escrow service is the safest way to complete online transactions, especially if you buy or sell items worth a significant amount of money. By using Trade Safe instead of doing it yourself, however, there’s always going to be some fee added on top of your regular transaction costs – which can make it seem like you’re spending more money than usual.
However, the good thing about these companies is that they’re straightforward to use, and the fees are always clearly outlined before a contract between two parties has been made. There’s no need to worry about whether or not there will be any additional costs added on later because every possible scenario has already been planned for in advance before anything is sent over.