The Difference Between Payment Service Providers and Escrow Service Providers
Why should I use Middletrust? What makes you different from a service like Paystack, Flutterwave, or any other payment service provider. The answer is quite simple, Middletrust is not a traditional payment service provider like the above listed, we are an escrow service provider, which means that though we can help you get payments from point A to point B we offer a slightly different service which focuses on security, compliance and customer satisfaction.
What is the difference between a payment service provider and an escrow service provider?
An escrow service is a conditional payment service.
A traditional payment service provider will move money from point A to point B, immediately you click the send button, and there is little or nothing you can do after that. If you found that you were dealing with a scammer, you could go through a lot trying to get your money back, and even that is not a guarantee.
The payer and payee first agree on conditions that will determine whether the payment is paid on to the payee or back to the payer.
The payer then makes payment to the escrow service, and the escrow service then holds the payment subject to the agreed conditions.
This situation ensures (if the escrow conditions were set correctly) that the payee can perform whatever they have to do (supply goods or services) so that if they do so, they are 100% sure of getting fully paid. At the same time, the payer is certain of receiving the goods or services promised, or at worst they receive their payment back.
Escrow is the only method that can simultaneously protect both the payer and payee because escrow service providers are conditional payment providers, all escrow services are payment service providers, but not all payment service providers are escrow providers, as there are many other types of payment that do not involve escrow or conditional payment.
Now that you understand the differences between payment service providers and escrow service providers, which of these service providers is more appropriate for your kind of business? Would a traditional payment service provider be more appropriate or would you prefer the extra measure of security offered by escrow service providers? Let us in on your thoughts.
