Escrow is a payment arrangement that separates funding from settlement. Instead of one party simply paying the other before receiving the goods/service, funds are secured within an escrow account and later settled in accordance with the transaction details.
GoEscrow provides an Australian escrow payment service for eligible transactions. This page explains the practical payment model, common use cases and the questions buyers, sellers and businesses should consider before using escrow.
What is an escrow service?
An escrow service provides a structured payment process between parties to a transaction. The payer funds the agreed amount into escrow. The payee can then have greater confidence that the transaction has been funded before completing the agreed handover or service step. Settlement occurs later in accordance with the transaction details.
The important distinction is between funding and settlement. Funding secures money for the transaction. Settlement is the later remittance those funds to the payee when the applicable conditions are met and settlement is authorised.
How does GoEscrow work?
- Create the transaction. The parties establish the transaction and its payment details.
- Accept the details. The relevant parties review and accept the transaction.
- Fund escrow. The payer funds the agreed transaction amount using the available funding method.
- Confirm funding. The transaction status provides independent confirmation that the agreed funds are in escrow.
- Complete the transaction. The parties carry out their agreed handover, service or other transaction step.
- Authorise settlement. When the applicable conditions are met, the payer authorises settlement and GoEscrow remits the escrow funds to the payee in accordance with the transaction.
Why use escrow instead of paying directly?
Direct payment can create a timing problem. A buyer may not want to transfer a substantial amount to an unfamiliar seller before receiving what was agreed. A seller or service provider may not want to complete handover or work without the confidence that the agreed money is secured.
Escrow addresses that timing problem by allowing the transaction to be funded before final settlement to the payee.
What transactions can use escrow?
Escrow can be relevant to many transactions where payment timing and counterparty confidence matter. Examples can include:
- private sales of vehicles and other valuable goods;
- business-to-business transactions;
- services where payment is secured before an agreed completion step;
- marketplace transactions between parties who do not already know each other; and
- other eligible transactions where the parties want funding and settlement to occur at different stages.
Availability depends on the transaction, users, applicable limits and GoEscrow’s product terms.
Is an escrow account the same as an escrow service?
For a fuller explanation of account terminology and the differences between an escrow service and an account, read our Australian escrow accounts guide.
People often search for an “escrow account” when they are really looking for a way to secure payment between two parties. The relevant question is not simply where money sits; it is how the payment facility operates, who the parties are, what must happen before settlement and what terms govern the transaction.
GoEscrow provides its escrow payment facility under its applicable product documentation. Users should review the Product Disclosure Statement, Financial Services Guide and Terms of Use rather than assuming every service described as “escrow” works the same way.
What should I check when choosing an escrow service in Australia?
- Who provides the service? Verify the actual legal entity and official website.
- What product documents apply? Read the terms and applicable disclosure documents.
- How is funding confirmed? Do not rely solely on screenshots or messages from the other party.
- How does settlement work? Understand who authorises settlement and when.
- What happens if the transaction changes or is disputed? Review the cancellation and dispute process.
- What are the applicable fees and limits? Check these for the actual transaction before funding.
Does escrow verify the goods or services?
Not necessarily. GoEscrow manages the financial interaction. It does not automatically inspect goods, establish value, verify mechanical condition or determine whether a service has been performed satisfactorily. The parties remain responsible for the commercial checks relevant to their transaction.
Escrow for private sales
Private sales are a straightforward example of the payment timing problem. The buyer may not want to pay an unknown seller first, while the seller may not want to release a valuable item first.
See Safe Payment for Private Sales in Australia and How to Pay Safely on Facebook Marketplace in Australia.
Escrow for private vehicle sales
Vehicle transactions can involve significant amounts and a physical handover. GoEscrow can separate funding from the agreed vehicle handover for an eligible transaction.
See How to Pay Safely When Buying a Car Privately in Australia and How to Receive Payment Safely When Selling a Car Privately in Australia.
Escrow for businesses and service transactions
Businesses can also face payment timing risk. A customer may want confidence before releasing payment, while a supplier or service provider may want confidence that money has been secured before committing resources or completing an agreed stage.
The suitability of escrow depends on the particular commercial arrangement and the applicable GoEscrow transaction type and terms.
Frequently asked questions
Is escrow available in Australia?
Yes. GoEscrow provides an Australian escrow payment service for eligible transactions, subject to its applicable product terms and limits.
Does the seller receive the money as soon as I fund escrow?
No. Funding and settlement are separate stages. The payer funds the transaction first; settlement to the payee occurs later in accordance with the transaction.
Can I use escrow for a private car sale?
Escrow can be useful for many car sales. Both buyer and seller should still perform the vehicle, ownership and transaction checks relevant to the sale.
Can businesses use escrow?
Escrow is common place in corporate and small business transactions. The appropriate structure depends on the commercial arrangement and applicable product terms.
Does GoEscrow guarantee a purchase or service?
No. GoEscrow manages the financial interaction. The parties remain responsible for assessing the underlying goods, services and counterparty.
New escrow guides
For a simple definition, read What Does Escrow Mean?. For payment-risk topics, see Upfront Payments and Deposits, Progress Payments and Staged Payments and Bank Guarantees, Performance Bonds and Escrow.
GoEscrow product information
Before using GoEscrow, review the Product Disclosure Statement, Financial Services Guide and Terms of Use. Check the applicable transaction fee and limits before funding.
Start an escrow transaction
GoEscrow is available through its official mobile apps and web app. Establish the transaction, review the details and applicable product terms, and complete the required account and identity steps before funding.
