Are you new to using Escrow payment solutions or do you find yourself struggling with the seemingly unclear terms that you come across? Are there certain terms that you might have interpreted wrongly and need clarity for? Don’t stress yourself any further as we have compiled a list of ten out of the important terms that you will come across during escrow transactions:

Transaction ID

This refers to a set of unique numbers generated for every transaction on Vesicash Escrow products. The transaction ID makes it easy to trace and fix specific problems that might be encountered.

Transacting Parties/Counterparty

Transacting Parties are the participants in an Escrow Transaction, they are the Buyer(s) or Seller(s). The counterparty is the other participant in an escrow transaction. The counterparty could be the Buyer or the Seller as Vesicash allows either of the transacting parties to initiate an escrow transaction.

Held in Escrow

“Held in escrow” is a term that is used at Vesicash to describe the transaction funds that can’t be released until both the Buyer and Seller are satisfied. An escrow transaction is marked as completed when funds that are ‘Held in Escrow’ have been released at the delivery of the goods or services.

Service Level Agreement

SLAs are the binding terms that the transacting parties must agree to before they can both proceed with the transaction. This could include the duration of the delivery, the frequency of payment disbursement (for milestone transactions) or the set inspection period.

Inspection Period

This is the time/window that allows for a Buyer to verify the quality and veracity of a Delivery that has been fulfilled by a Seller.

Accepted/Rejected Delivery

Accepted Delivery is a situation where the Buyer confirms the receipt of the goods and/or services delivered by the Seller. When this happens, authorization is given to release funds as agreed.

Rejected Delivery is a situation where the Buyer does not confirm the receipt of the goods and/or services delivered by the Seller either due to a change of mind or because the terms of the transaction were not met.

Release Funds/Disbursement

This is when the transaction funds being securely held in escrow are released to the Seller, via their provided Bank details, after successful completion of the transaction.

Transaction Time-Out

This happens when a Transaction has been accepted but remains not funded for a period of 7 days. Such a transaction is automatically closed after the lapse of the grace period.

Two-Factor Authorization

In Escrow transactions, this means that Funds are not released until both the Buyer and Seller indicate that the terms of the transactions have been met. Two-Factor Authorization implies that the Seller would have to confirm the delivery of goods and/or services and that the Buyer would also need to accept or reject this delivery before the next stage of the transaction is determined.

Transaction Due-Date

In Escrow transactions, this is the deadline by which the Seller is expected to indicate that an order is complete/delivered. The countdown towards the Due Date begins once a Transaction has been funded and the funds are being held securely.

Final Notes

Here you have them, a compilation of ten common escrow terms that you are likely to come across on your next transaction. Are there any other terms that you would like us to explain or are you interested in knowing more about our Products and Services at Vesicash? We are just an email away at info@vesicash.com and a phone call at +2347039914767.