Escrow vs. Direct Payment: Why Take the Extra Step?
In a world of instant transactions, adding an extra layer like escrow might seem cumbersome. Why not just send money directly to the seller, or vice-versa? While direct payments are faster, they inherently carry more risk. Escrow, though it adds a step, fundamentally mitigates this risk by ensuring both parties fulfill their commitments before any assets or funds change hands permanently.
Direct payment offers speed but little protection if the other party doesn't deliver. Escrow, conversely, provides a safety net. For buyers, it prevents losing money to scams or receiving substandard goods. For sellers, it assures that the buyer has the funds and is committed to the purchase once conditions are met. While it extends the transaction timeline, the peace of mind and financial security offered by escrow often far outweigh the convenience of direct payment, especially for high-value or complex transactions.
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