Escrow payment
Escrow, in international trade, is a service in which a trusted third party holds the buyer's funds until agreed conditions are met.
The importer pays the escrow service, the exporter is instructed to ship once that payment is verified, the importer has a set period after delivery to inspect and accept the goods, and only then are the funds released to the exporter. The fee may be borne by one side or split evenly, and the service is offered by international banks and firms specialising in escrow and custody. The cited source classes escrow as a cash-in-advance method suited to small transactions where the importer wants assurance that goods will actually be sent, and does not compare it with a letter of credit.
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