What Is Escrow Payment And How Does it Work in Nigeria?

Have you recently heard about escrow payment and how you can use it to carry out safe online transaction with a buyer or seller that you are not familiar with? Are you wondering how it works in Nigeria?

Okay. I am going to use this piece to explain what escrow service is and also recommend the safe escrow service company that you can use in Nigeria.

But before that, let’s get some basics of the potential of escrow payments in building the economy of Nigeria.

 

Ecommerce in Nigeria, estimated at $13 billion by the London based Economist Intelligence Unit (EIU), is a vital sector that, if properly harnessed, can create more means of livelihood for individuals and massive jobs for youths, enhance Market Access and sales for SME’s, boost economic development, reduce poverty and help in achieving some other Sustainable Development Goals (SDGs).

Unfortunately, the progress of ecommerce in Nigeria is being hampered by several factors, one of which is distrust caused by the activities of fraudsters and scammers who pose online as genuine sellers or buyers.
It is very common to have situations where buyers pay for goods and services online only to wake up to the realization that they have been scammed.

What Is Escrow Payment And How Does it Work in Nigeria?
What Is Escrow Payment And How Does it Work in Nigeria?

 

Same applies to unsuspecting sellers who sell their goods/services and end up either incurring losses or getting out rightly defrauded.

To solve the mistrust between buyers and sellers and to drastically reduce incidences of online fraud, escrow payment arrangements have proved beneficial.

 

Escrow payments are such that a buyer, instead of paying to the seller directly, agrees to an arrangement with the seller and pays the money to a mutually trusted third party (escrow company/agency) who holds the money and releases it to the seller when it has been confirmed that the buyer has received the goods/services.

Genuine escrow companies have unique and effective ways of protecting the sellers too and settling disputes that may arise.

 

Escrow Payment
What Is Escrow Payment And How Does it Work in Nigeria?

 

Escrow payment can be used for the purchase of virtually any kind of product/service, be it physical products like a pair of shoes, piece of furniture, electronics, car, land or real estate; virtual products like software, ebooks, digital images, music files, secret keys/access codes; or services like hiring someone to do web design, create music/video/graphic content, etc.

As fraudsters generally shy away from escrow arrangements, it has been shown that insisting on escrow payment is one effective way to know if a seller is genuine.

What Is Escrow Payment And How Does it Work in Nigeria?
What Is Escrow Payment And How Does it Work in Nigeria?

 

Escrow Service
What Is Escrow Payment And How Does it Work in Nigeria?

 

For a small fee, usually not more than 5 per cent of the transaction value, trusted online escrow companies can be engaged to protect both the buyer and seller and help boost ecommerce in Nigeria.

However, care must be taken to only use online escrow services that are certified by the International Financial and Escrow Services Accreditation Board, the official body that not only regulates against fake online escrow services but provides $2 billion insurance access to clients of certified escrow companies.

 

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