What is an Escrow?

An escrow can be defined as a neutral third party who holds the money on behalf of both parties involved in a particular transaction until the closing, allowing everything to be exchanged safely, fairly, and simultaneously. In other words, it's a process that two parties use when they're completing a transaction, and there's some uncertainty over whether one party can fulfill their obligations.

For Eg.- If you are buying a house, you wouldn't want to pay the seller unless they are ready to hand over the keys and the ownership of the house? When you're the owner, you wouldn't consider giving over the keys to your property and the title until you're paid, right? Escrow companies provide a great way to avoid getting shortchanged, as well as ensure that money goes to the seller properly.

So​me cases where Escrow Services may be useful:

1). Escrow and Real Estate - Escrow accounts are very popular for real estate. By placing funds in escrow, a buyer may be able to perform due diligence on a potential acquisition. Furthermore, an escrow account ensures that a buyer will close a deal. Escrow accounts can be used, for example, when selling a house, there may be conditions attached to the sale, such as passing an inspection, which would require escrow service. When this happens, the buyer deposits the money for the house in an escrow account. By doing so, the seller can get the house inspected with the confidence that the buyer will pay. The seller receives the funds in the escrow account once all conditions for the sale have been met.

2) Escrow and Online Sales - Similar to escrow in real estate and escrow in the stock market, online escrow protects buyers and sellers from fraud or non-payment. An online platform serves as a middleman for online sales. The buyer sends the money to a third party, which holds it until the product is delivered. Following receipt and verification of a product, the escrow service provider releases the seller's funds. In most cases, escrow services are not needed; however, when they are, they are best for high-ticket items, such as jewelry or art. When using an online escrow service, there is a fee involved. The use of escrow security may be beneficial in high-ticket transactions, however, there are fees associated with it.

3) Escrow and the Stock Market - Escrow services are often used to buy and sell stocks. A stock transaction is handled through an escrow account, which holds stocks in escrow until a specific transaction or other requirement is met. Often, escrow-issued stock belongs to the shareholder. It is possible for shareholders to be unable to sell their shares right away or they may have limited access to sell the stock. 

In summary

It is possible to do many different things with Escrow, including buying and selling real estate, buying and selling stocks, and making online purchases. Buyers' money is held in an escrow account until the transaction is complete, or until they receive or verify that their product was received in good condition. As soon as the buyer approves the deal, the seller receives the money from the escrow account. Escrow accounts are managed by third-party companies, which generally charge a fee.

Also Check: Escrow Accounts: What Home Buyers Need to Know

Digital Escrow Service In India.

Digital escrow services are offered by many companies in India. Among the most trusted is Vouch

Vouch’s Digital Escrow service is a transparent way for buyers and sellers to build trust and secure a clean transfer of product and payment. Sellers can feel assured that they will be fairly compensated promptly, and buyers will feel confident that their order will be delivered as expected and on schedule. Vouch Digital Escrow keeps you updated and informed at every step of the transaction process till the end. Vouch’s professionals are always available to assist you with all queries that you may have during the entire transaction process. 

There is no scope for deceit or fraud since the payments, shipping, delivery, and execution are carried out under the honest and watchful eyes of the Vouch’s professionals. With Vouch, any business transaction becomes transparent, uncomplicated, and hassle-free. If you ever come across a fraudster asking for OTP, asking you to scan a QR code, or asking you to click on phishing links, you can simply refuse and ask him/her to proceed with the transaction through Vouch.

Check back here to learn more about Escrow and how to protect yourself from fraud.


Safety is not just about protecting your credit, debit card number, and UPI accounts. It's about having control of your money till you've received the product or service you bought online!

Now that we have you up to date on online safety, let's get your transactions secure on Vouch. It's just a click away.