What is “escrow”?

The term “escrow” is generally understood to refer to an agreement between parties to set aside a sum of money to be held by a third party until certain conditions are met.

The Financial Conduct Authority describes “escrow” as: “a payment service consisting of the transfer of funds from a payer to a payee, with the platform holding the funds pending the payee’s fulfilment of certain conditions or confirmation by the payer.” This is the service Security for Expenses Ltd. provide.

(In legal terms, this is not strictly accurate as in English Law “escrow” refers specifically to the conditional delivery of a deed after execution; that is where a deed only becomes binding once one or more conditions have been fulfilled.)