Escrow is an essential service. It allows you to buy expensive goods online from people you don’t know or trust without the risk of being scammed.
Escrow.com has been a market leader for a long time in this industry, mainly because it has a perfect premium domain name that steals traffic from its competitors. But this is where the upsides of Escrow.com end. Escrow.com has many downsides that are so significant that it makes the use of it impossible.
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I don’t know why Escrow.com forces its clients to do KYC because, in reality, it’s not required by law. You can be sure of this because other escrow services based in the USA do not demand KYC. An escrow company is merely a middleman, not a financial service provider.
KYC is easy for some people, but it might get extremely tedious if you try to do a transaction as a business. But this is not the main issue. As a private person concerned about your security, you should strive to avoid giving your personal documents to companies unless it’s enforced by law and there’s no other way around it.
Not accepting 3rd party money transfers
Escrow.com accepts PayPal and card payments for amounts below $5000, but for higher amounts, only wire transfer is accepted. One could argue if you need Escrow.com at all when using PayPal since PayPal offers its own buyer protection, which functions well enough. Wire transfer may not be a problem for you if you live in the USA, but for foreigners, it is. Making a bank transfer to the USA from another country is slow and expensive. In some countries, it may not even be possible due to economic sanctions or bank policies. For example, many online banks, especially in Europe, can only handle SEPA payments. And for transfers to the USA, you will need to use 3rd party money transfer services such as TransferWise. Services like TransferWise are fully licensed as financial institutions, do their own KYC, so there’s no reason not to accept payments via them.
Not accepting Bitcoin
Bitcoin has been around for over ten years, and it has been mainstream for several years already. If a large company still refuses to accept Bitcoin’s existence, it raises some red flags. You should be alerted around online businesses that lag in tech because who knows what other mistakes they can make.
I could forgive Escrow.com for not accepting Bitcoin if there were other easily accessible payment methods available. But since the only payment option accepted by them (wire transfer) is very problematic, Bitcoin is very much needed, and not offering it is a huge mistake.
Full refund not possible
If the escrow process is cancelled for any reason, Escrow.com will still take their service fee. Sure it’s not huge, but it’s still unfair to you if the reason for cancellation is simply that the seller decided not to go with the transaction. The other reason why there may have to be a refund is if you didn’t pass the KYC or if you made a bank transfer via 3rd party, which was not accepted. That’s right, if you make a bank transfer via 3rd party which Escrow.com will not accept, they will still take the fees from this amount and refund you the rest. Surely a good business model for them.
So if Escow.com is out of the question, what other escrow services should one use?
Well, first of all, you should not trust an escrow service just because someone wrote about it. For all you know, it could be a sponsored post. When dealing with money, you should always do your own research and check multiple sources for information. Thus we encourage everyone to use Google to find an escrow service you like.
Things to pay attention to when choosing an escrow service
- Make sure the website displays corporate and contact information clearly. Verify this information from the public company register.
- Search for reviews, both positive and negative.
- Contact the escrow service before transferring any money to them, ask about KYC, their payment options, and other important information so that there won’t be any surprises later.
(Last Updated On: February 17, 2021)