In a large transaction, wondering if you can trust the person on the other side of the deal is often a real dilemma. This is an all too common situation in a world where the internet has opened the doors to commerce in ways which we are still unfolding. People trade with others in different countries, states, cities, over Instagram, WhatsApp, you name it. But how do you trust someone you don’t know from Adam, have never done business with and have no idea if what they’re selling is even good, to begin with?

That’s where the concept of escrow comes in and understanding what it is and how it works can help you to minimize risk and trade more comfortably. Whether you’re buying or selling to someone on Instagram or from overseas, it is useful to know to help you gain access to different markets, and open up more opportunities for doing business.

What is Escrow? defines Escrow as “an impartial third party in a major financial transaction between two (or more) parties that holds a valuable asset (usually cash) until the transaction is complete.” Escrow providers are neutral arbiters in any transaction and are only there to make sure both parties meet their obligations and leave a transaction completely happy with the result. Typically, escrow companies keep the funds any two parties are trading with so that both parties can safely trade with each other and meet all obligations they’ve agreed to. In this way, both parties are assured that neither of them will get cheated in the process of doing business with each other.

Traditional escrow is used in transactions such as buying/selling a house (typically in western countries), or in regular buying/selling transactions where establishing trust is an issue. In the case of buying a home, one would place funds in an escrow account to show the seller that you’re serious and also because you do not want to just give the money directly to the seller. If any problem arises in the process of buying that home, taking the money out of the escrow account is quite an easy process.

Online/Digital Escrow

With the meteoric rise in the use of mobile technology in Africa and the myriad of e-commerce platforms and digital marketplaces cropping up by the day, which include Tonaton, Checki,, just to name a few, goods and services are being sold over the ether in stunning volumes.

A report by research firm Statista valued e-commerce in Africa at 16.5 billion dollars in 2017. Consulting firm McKinsey also predicts that this value could go up to over 75 billion dollars by 2025. But problems with delivery and an increasing number of cases of scams and fake/low-quality products continue to be serious impediments to e-commerce in Africa. Due to a chronic lack of trust in e-commerce shopping platforms, customers still insist on paying cash on delivery, leading to logistical and payment hell for a lot of these platforms and sometimes even the death of delivery agents

In the specific case of digital marketplaces such as Tonaton and, scammers are slowly but surely taking over these platforms, selling fake, cheap replica items on these sites. Customers often have no protection, save for their wits and savvy and are often left unprotected when buying from charlatans online, leading to further lack of trust in e-commerce. 

This has become a kind of vicious cycle.

The solution to all these problems? Digital Escrow. Digital escrow is simply the concept of escrow enhanced by the use of technology. Just like traditional escrow solutions offered by banks and other financial institutions, digital escrow aims to create safe spaces online where people can trade knowing their funds and goods are safe until both parties are satisfied in a transaction. Importantly, digital escrow is easier and faster and has significantly lower transaction fees compared to traditional alternatives. 

To use it, a customer simply creates an online escrow account with a trusted digital escrow platform, adds the seller of whatever they want to buy to a transaction, make payment and then proceeds to safely trade. Once the goods or services are exchanged to the buyer’s satisfaction, the funds are automatically released to the seller

In fact, the problems in e-commerce and digital escrow platforms and provided the inspiration to develop PayLock to help both buyers and sellers avoid scammers on these platforms. We have been operating on two continents, Africa and South America for the past year. With offices in Accra and Santiago, Chile, we have been helping merchants and buyers to prevent fraud, and non-payment in their transactions and helping sellers gain access to new markets and access to new opportunities to sell their goods and services.

Not only do our customers use PayLock to protect their funds when they trade with e-commerce merchants, but they also use the platform to hire developers, writers, freelancers, etc. and we enable them to schedule milestone payments for services such as software development, blog articles, you name it.

Increasingly, we are seeing a lot of positive interest in goods, services, and talent from Africa and we are happy and proud to be part of facilitating and fostering such connections with PayLock, our safe and secure escrow platform. Sign up for an account today to start protecting your transactions.

Here’s a tutorial on how to complete the sign-up process.