New Feature: Escrow Payment Integration
Posted on April 19th, 2010 by Luke Moulton
As part of our ongoing efforts to improve security when buying and selling websites on Flippa, we’ve released Escrow.com integration. Buyers and sellers can now initiate an Escrow transaction from within the Sale Completion Area if it’s been chosen as a payment option by the seller. This update aims to make trading websites more secure for both buyers and sellers.
What is Escrow?
In the case of a website marketplace such as Flippa, Escrow.com accepts funds from the buyer and holds them in trust until the buyer and seller agree that the transfer of the domain has taken place successfully. The company also watches the WHOIS information to see if this transfer has been completed. Once everything looks good, the funds are released to the seller and everyone is happy!
Why use Escrow.com on Flippa?
When you instigate an Escrow transaction via the auction’s Sale Completion Area, you will receive a 10% discount on Escrow fees. (This should increase to 20% as we process more transactions.)
Instead of receiving a commission on Escrow fees, we’re passing it directly on to you as a discount.
To calculate your fees, checkout the Escrow calculator here – remembering to deduct 10% from the final fee quote. This probably isn’t feasible for a $300 entry-level website, but once your price starts to get over about $500, you might like the extra safety that an escrow gives both you and your buyer.
How does it Work?
If the seller has chosen Escrow as a payment method then Escrow will be available as a payment method from the auction’s Sale Completion Area. You have 3 days to initiate Escrow once a buyer has placed the winning bid. The buyer and seller will need to agree who pays the fees before instigating the transaction.
As a buyer or seller you will receive Escrow status emails directly from Escrow and we will be notified once a transaction has been successfully processed.
For a full explanation of the Escrow process, view the Escrow FAQ.
We hope this initiative leads to more secure transactions for both buyers and sellers.
Comments (51)
Comments are closed.
April 19, 2010 - 3:09 pm
Cool, I’ve been waiting for this one! Yah, a sale over $500 better go pass through escrow. Thanks for the 10% discount too
BTW, does the 10% discount will long last via the auction’s Sale Completion area?
April 19, 2010 - 3:17 pm
You have 3 days to instigate an Escrow transaction from within the sales completion area and take advantage of the 10% discount.
April 19, 2010 - 3:14 pm
You told me it was coming a long time ago, and this is a huge upgrade from what people have been using. Great job, guys!
April 19, 2010 - 3:43 pm
I am glad that you have integrated the much desired Escrow to facilitate transactions.
However, hope the buyer for amount over $300 should also be able to select for Escrow payment and not solely for the buyer to decide.
In any case, it’s good news and well done on this one.
April 19, 2010 - 4:44 pm
Now, another reason why flippa is the safest place to trade websites online!
April 19, 2010 - 7:35 pm
Never used Escrow.com before but I almost got burnt 2 times lately so I think it’s time to look at their offers
Thanks Flippa!
April 19, 2010 - 8:07 pm
I know this has been a long time in the making and it wasn’t easy to accomplish so, for that, well done, Luke. And I think it’s a good move to pass on the escrow commission as a discount. If you’re not gaining directly from the volume of transactions going through escrow.com, you won’t mind me stating some truths about them.
First, and this can’t be stressed enough – escrow.com is just not right for most people. I’ve explained this in various posts on Sitepoint and my own forums. Escrow.com do not escrow websites – they only escrow domains.
I’d like to add that escrow.com are notorious for charging a percentage based on the full value of the transaction though they provide protection for just the domain name. You seem to suggest that escrow isn’t suitable for a $300 entry-level website but suitable for websites at $500 and above. The truth is that it’s not suitable for ANY websites, period, it’s a domain name service. But it’s particularly NOT suitable for the higher value sites.
And there are several reasons why escrow.com is not suitable for anybody who’s not based in the US of A. If you’re based in Europe you’re better off using a European escrow company (more protection for you).
If you’re selling a site that has a lot of valuable assets such as content, scripts, subscribers, databases etc., etc., if you used escrow.com it’s easy for the buyer to pay the money into escrow, get all your content and scripts etc., then withdraw from the transaction and get a refund from escrow.com. In essence, he gets all your stuff for free (except the domain)! escrow.com’s terms will ensure you get the domain back but you’ve given away your most valuable stuff. On some occassions, you can lose the domain as well. If you’re a buyer and you use escrow.com, you could end up with escrow.com releasing your funds to the seller even though you haven’t received everything promised from the seller. In fact, if the seller gives you control of just the domain name and no files, folders or access to his hosting account, escrow.com will release the funds to him.
escrow.com is far from 100% safe for either buyer or seller.
If your house insurance charged you an annual premium for the full value of the house, but provided cover for just the front door, you’d call that daylight robbery. Is escrow.com charging Flippa users a percentage of just the domain value or are they ripping Flippa users off by charging a percentage of the full value of the site?
April 20, 2010 - 2:20 am
Thanks for the heads up, we should be aware of this issue. I never thought of it before, yep, I also had a transaction gone through escrow and now only I realized that they only can protect domains and not all the web files being sent like mentioned above.
But I think this is safer than PayPal.
What about having black and white papers to be signed (Agreement/Contract of Sale)? Or maybe having lawyer involves into this if the web files also are the valuable assets?
April 20, 2010 - 7:10 am
You are right, it’s safer than Paypal. But then so are all the domain escrow companies – companies that specialise in domain escrow, are transparent that they escrow only the domain name and charge you for only domain escrow.
Using a good lawyer in your home country is the safest route, but it’s not suitable for low value transactions as the lawyer’s fees could be more than the value of the website you’re buying/selling.
April 20, 2010 - 9:20 am
Thanks for pointing these issues out FruitMedley. Escrow does indeed have it’s shortcomings as you’ve highlighted however, it does provide a higher level of security than Paypal and is cheaper than a lawyer.
Escrow charges based on the total value of the transaction.
April 20, 2010 - 11:44 am
Thanks FruitMedley. I’ve discussed this with you before, and we’ve discussed it ad nauseam internally.
The take home message is that using Escrow.com is significantly safer than using direct funds transfer, for both sides.
Yes, there are caveats. But on the whole it’s well ahead of anything else we can recommend at the moment. There just isn’t another trusted, worldwide service which comes as close as Escrow.com to giving both sides of a transaction safety at a reasonable price.
When something better for websites comes along, we’ll consider moving to it. Until then, we need to help out our users as much as we can.
April 20, 2010 - 11:57 am
FruitMedleyPost : not sure if you’ve recently used Escrow or not but they have two options, ones for domains only and one for domains plus content. If they get the sense your transaction has any content attached, they won’t let you use the domain only method. I know – I tried to run an auction through and chose domain only and they rejected it after seeing that the transfer included content. Of course for safety, don’t let the opposing party insist on the domain transfer method, use the with content option.
I would *never* transfer a site with much value without using escrow. They’ve been very professional and I don’t worry at all about them.
Thanks Flippa for integrating this and for passing on the savings, will be enjoying this immensely next time I buy a high valued site here.
May 13, 2010 - 7:00 am
@Dave
yeah but say if you spend a lot in coding your website and its very unique ,
once the funds are in escrow the buyer asks to transfer the server ,there are chances to getting screwed . In the inspection period if buyer says no , then we will get only the domain back, what about the content ?
May 13, 2010 - 6:51 am
The problem is escrow.com is not taking care of website , they are good with just domain names like fruity melody said
Is sedo.com good with website escrow ? im not sure about they got this service btw they sell complete websites too
their transaction fees was very high but if they are good with website escrow , maybe if flippa plan to integrate flippa could crack a deal with them about fees
Just my 2 cents
October 24, 2010 - 6:20 pm
SO WHAT HAPPENS IF ONLY DOMAIN IS TRANSFER WITH THIS SERVICE? ANY TIPS?
April 20, 2010 - 11:27 am
Thank you!! tierd of being scammed and f***ed because of Paypals lack of giving a s*** about anything non physical and them letting credit cards steal our money without even making sure we get our websites back..
I’ve lost over $5000 dealing with BS scammers through Paypal so never will I use them again for anything over $600.
April 20, 2010 - 2:21 pm
Wow, that’s good… and the most important is more 10% on discount.. keep it up
April 20, 2010 - 2:32 pm
If you’re the seller of a website, let the buyer know in your details that you will only transfer the content, scripts, and everything else included with the website after the payment is verified by escrow, and the domain transfer is completed by them. Only after the payment is on it’s way to you by escrow would I send the rest of the site. This way the buyer can’t rip you off.
April 20, 2010 - 11:24 pm
@15: If that’s the case, then you can rip the buyer off. When the money is on its way from escrow to you, you can simply not transferring the files and left the buyer only with the domain. His site will be dead, that’s still unsafe
May 9, 2010 - 8:35 am
Not sure if that’s correct given my understanding of the process:
1. Buyer wins auction, sends funds to Escrow.com (preferably using wire transfer)
2. Seller does nothing until payment is verified by Escrow.com
3. Upon verification, domain and files are transferred to seller
4. If Buyer approves within inspection period, funds are transferred to Seller
5. If Buyer does not approve, Escrow.com holds Buyer’s money until domain is given back to Seller.
Sure, the Buyer could keep all your files but you get your domain back, or you keep all the Buyer’s cash.
I just experienced my first transaction here on Flippa as a seller, and it’s obvious the buyer was trying to rip me off, saying that it’s common practice to transfer the domain before I’d received funds. I told him there was no way I was transferring anything until payment was verified by Escrow.com, and he insisted I was a n00b who didn’t know what he was doing. So he’s cancelled.
April 20, 2010 - 2:40 pm
Would Escrow.com be able to handle a multiple domain listing under the domain name only option…
For example, if I submitted a listing to sell domainname.com, domainname.net, domainname.org, and domain-name.com as a lot…
Would Escrow.com protect both parties in verifying who.is data for all bundled names?
April 20, 2010 - 6:38 pm
Escrow.com is not all that great for international sellers. I guess it’s only feasible for larger transactions. The costs are significant and most importantly, they don’t support PayPal payment. You can wire the money, but this takes time and of course the bank will levy a charge. Sending a regular check outside the US will require the check being sent BACK to the US to clear, and this will take probably a month. Not too good for the cashflow.
Would probably only use for transactions exceeding amybe 800 or 1000.
April 20, 2010 - 8:34 pm
Fabulous to see escrow integrated, well done to all at Flippa.
I sold an established site using escrow and the $5K payment went through to my Australian bank account without a hitch. The buyer and I split the escrow fees.
I know more about escrow now and that it isn’t 100% fail safe but it sure is a great deal better than PayPal!
The 10% is great, thanks for passing that on.
April 21, 2010 - 5:06 am
Great that will prevent problems like the ones I had with sellers before.
April 21, 2010 - 5:47 am
I’m still curios about this question, so I asked again: why flippa not create their own escrow service?
its good business for flippa too.
April 21, 2010 - 9:11 am
It is VERY expensive to become accredited as an Escrow provider that can operate globally.
April 29, 2010 - 6:58 am
i agree… this is something that is completely unnecessary as the true escrow.com site also extends a very loyal level of customer trust. I, personally, would rather use escrow.com than a newly developed flippa escrow service. Now, after a year or two, once flippa has learned ironed out any standing kinks, i probably would be fine with it. but i like things as they are currently, and i have yet to sell anything. by the way, whats up Luke?! How is your day going?!
April 21, 2010 - 11:14 am
Hello.
I agree with FruitMedley Post.
I live in Europe and escrow’s payment methodes (for seller) are not good.
Few months ago i was received request from one of flippa’s buyer. He was purchased 3 !!! websites (for total sum over $10,000) from one seller there on flippa and they together used escrow service.
After sales he got ONLY control over 3 domains and nothing else. Seller did not gave him webhosting details etc.
Buyer tried several times contact escrow, but they already trasnferred funds to seller.
This buyer asked me for help and support. After my own investigation I offer buyer to restore all 3 sites from scratch, but this is another story not related with escrow.
Escrow service is NOT safe for buyer !!!
You can spend few thousands dollars but they can quarantee only domain transfer process (domain cost $7-15).
April 21, 2010 - 2:08 pm
Well those reading my blog read about this integration in the interview I had with Luke. Glad to see if finally launch!
FruitMedley makes some really good points but I have to agree with Luke and Dave – even with Escrow.com’s shortcomings, it’s better than PayPal or dealing directly with buyers and sellers – or hiring a lawyer.
The discount is nice too.
Travis
April 21, 2010 - 3:31 pm
Has any one from India has used Escrow service? If yes what was the mode of money transaction from escrow. Do they wire funds to Indian banks??
April 22, 2010 - 1:15 am
Hi, the url to Escrow Flippa question page
http://flippa.com/help/escrow
is not found. Also will Asian users be able to use this service?
April 23, 2010 - 9:52 am
What countries does Escrow.com support?
Escrow.com currently supports transactions from all over the world. However, there is a small list of countries that we do not support. These include Burma (Myanmar), Cuba, Indonesia, Iran, Iraq, Liberia, Libya, Moldova, Nigeria, North Korea, Romania, Syria and Zimbabwe.
This source is taken from:
https://www.escrow.com/support/faq/index.asp?sid=7&qid=142
April 27, 2010 - 8:37 pm
Woohoo.. Thanks for the link Yurckk. My auction is about to end here
http://flippa.com/auctions/92077/Authority-Shoutbox-Hosting-Site
And with what it seems like most of my bidders wants to use Escrow.com I am glad Iknow I can use it.Cheers
April 22, 2010 - 1:35 am
Well, as many have mentioned before, Escrow.com does not support payments via credit cards or paypal. For websites they only accept wire transfer. This is not very confortable, and for customers in Europe even worse, because of the long transaction times between europe and us banks.
April 23, 2010 - 12:31 am
the only thing wich can justify success fee is providing an escrow service by you flippa, otherwise the success fee must not be applied.
we can’t pay :
1-for listing.
2-when site sold.
3-to get our money.
April 23, 2010 - 4:28 am
Dave: “FruitMedleyPost : not sure if you’ve recently used Escrow or not but they have two options, ones for domains only and one for domains plus content.”
Dave, escrow.com has four options – Motor Vehicle, Domain, General Merchandise and Services. That’s it. I just double checked in case something changed in the last few days.
In fact, it used to be just the first three options and I’ve had several discussions with the managers at escrow.com over the years about introducing an option for websites. When they finally introduced a fourth option (I think it was about 2 years ago) they disappointingly didn’t introduce one for websites but made it Services instead. I suppose the logic was that if they made it as wide as possible then the less smart among us will just pick the closest match option for any given transaction in the blind belief that it covers the risk involved.
I haven’t done an escrow transaction through the Flippa interface so can’t tell you if there’s something different in there. But I’d be very surprised if escrow.com is offering a website option for just Flippa customers and not anyone else (Flippa would have made big news out of it if it were true).
Hendrik, they do take CC up to (I think) $5K and you have to fax them a copy of your CC. Wire transfers to the US take 24 hours from the UK. But, on more than one occasion, escrow.com’s bank (and the intermediary) screwed up which resulted in delaying the transaction by over a week. If you’re in Europe, use a European escrow – it’s a lot safer.
Michael, no they don’t do multiple domains. But, that’s a good point. The true nature of their service becomes obvious when you try to put through a multiple domain transaction.
Is escrow.com safer than sending money by Paypal and crossing your fingers? Yes, I never argued differently. Is escrow.com even 50% safe for either buyer or seller in a website transaction? Not on your life. I have a story in my forums about how I accidentally ended up with someone’s $15,000 domain because of an escrow.com screw-up. That seller only got his domain back because I chased him down and gave it back to him. There are several ways that the most savvy among us can lose our entire money/site using escrow.com. And I’ve discussed some of them at my forums.
April 23, 2010 - 9:42 am
Would you mind giving me a link to the posts at your forums? I would like to review them to be as informed as possible before using Escrow.com
April 24, 2010 - 2:04 am
chark82, you could try my signature
April 23, 2010 - 9:31 am
Does this option work with the Buy-It-Now button? Or does that still forward you to Paypal?
April 23, 2010 - 12:56 pm
The Buy it Now button will (naturally) go to PayPal if you have set a PayPal address. If you don’t set a PayPal address then Escrow.com can be used once that BIN has been accepted via the normal means. So if you don’t want the system to use PayPal for BINs, don’t set your PayPal e-mail address in that field.
April 23, 2010 - 11:50 pm
OK, thanks for the info, buddy!
April 23, 2010 - 6:00 pm
Well, because I see this thread and I know that it has a lot of demand (and I just don’t have the time to create this service) I will reveal my idea in public – calling flippa to DO IT or some one else that wants to pick up the idea.
Creating a service that work LIKE escrow.com is VERY expencive – this is true BUT creating a service that it complementary is not at all.
This is my idea – (if you use it I hope you will remember me and give to use it for free
)
TrustGuardTransfers.com
My company will work WITH escrow.com
1. both parties agree to trust my company
2. we are the ones that communicate with escrow.com we DO THE TRANSFER we approve every thing and release the money.
Very simple.
For start this can be done WITH OUT escrow.com even knowing about this (both parties give us user name + passwords – we changes them until the transaction is done and the put them back and give them (buyer and seller) their logins back.
This is just to get your heads spinning, as I said I have no time for creating this BUT – flipa: this is FOR YOU.
you can increase your site revenue by 100% by doing this + you will DOMINATE the website selling marketplace for sure.
Thank
April 24, 2010 - 5:27 pm
but how about inspection period? escrow allows up to 30 days inspection period, during which the goods can be rejected by buyer. how the buyer can be deceived, if he can use 30 days inspection period,and reject purchase, if he will not receive agreed goods, or he is unsatisfied with purchase due to fraud revenue claimed ? is it possible, that escrow can release money to seller during inspection period? has anybody used this inspection period and can share this experience ?
April 26, 2010 - 12:21 am
I’m a bit thick so bare with me but as a seller in europe do I need to create an account with escrow.com to take advantage of this service?
April 27, 2010 - 6:39 am
Dexter_1285, it sounds like both buyer and seller would need to trust the intermediary more than they trust escrow.com. The intermediary is going to be handling hundreds of thousands of dollars of web properties and controlling a similar amount in funds. Who regulates him? What happens if there’s a dispute between buyer and seller – the seller demands release and the buyer states that he hasn’t received the full 60 day support promised under the contract?
laurynas2009, where did you get a 30 day inspection period from? AFAIK, with escrow.com the maximum transaction period is 10 days. So those sales that involve the seller giving support for 30 days can’t be structured for payment to be made on completion of all contractual obligations.
Some seem to be uncertain on where the risks lie. Let me explain.
For buyers:
The buyer needs to release the funds if the domain has been transferred to his name. It doesn’t matter if the site files, database, passwords, hosting, content, code etc is not transferred – the buyer still has to release the funds. If you’ve just spent $10K on a website, the domain has transferred you and the seller is not providing anything else escrow.com will release the funds – you have no say in the matter.
For Sellers:
Assume the buyer isn’t a genuine buyer and just wants to see all your code, your stats, your Adsense account, other earning details, your most profitable keywords, your Adwords campaign info etc; or get his hands on your subscriber list. He could start an escrow.com transaction, send the funds to escrow.com, get all the details he wants from you and then refuse to accept the domain. He’ll contact escrow and cancel the transaction. As the domain is still in your name, escrow.com will cancel the transaction and refund his money. You’ve now got a competitor who has all the inside information he needs to wipe you out.
April 27, 2010 - 8:57 pm
Do you all know what happens in a FLIPPA AUCTION DISPUTE?
“If the dispute is found in your favour, your auction will automatically be relisted for free, and the success fee will be waived!
If the dispute is found against you, a black mark may be recorded against you, and there may be further consequences.”
NOW THAT IS FLIPPA WHEN YOU NEEDS THEM THE MOST!!
April 29, 2010 - 1:21 am
Any chance that we can use Google Checkout payment in Flippa as mode of payment since PayPal is dead end for large amount of money for sellers.
It will be appreciated if the Flippa team integrate the Google Checkout in the payment process or offer it as a mode of payment since the big companies afford them.
Thank you
April 29, 2010 - 7:01 am
im for this one too. paypal has an additional 3% 3 month rolling reserve on our business account and i dont see them dropping it anytime soon. a secondary web based option could definitely prove to be very useful.
April 29, 2010 - 8:40 am
Thanks for the suggestion Simo. We’ll consider this payment method if we see a desire for it amongst buyers and sellers in the Flippa community.
April 29, 2010 - 11:23 am
Simo,
We wish! Google Checkout is only currently available to US and UK merchants. We’re an Australian company so this avenue is currently not available to us – but as soon as Google come up with the goods, you can guarantee we’ll be looking at it.
April 29, 2010 - 6:24 pm
Thank you. but the majority of the buyers and sellers are from those 2 countries i think here in Flippa. also you can open an US bank account easy even from Australia and Google Checkout should listen to you guys since you are a big company and why not buy your company (i am just kidding on this one) Thank you