Escrow business question

I can see a lot of sites offering escrow services to protect the interest of their members espacially freelance sites like GTF and SL...

My question is, when a buyer deposits money to escrow, where does the fund go? Or how does the admin keep the funds?

For example, the amount involved is just $50. Does admin needs to keep this in his bank and withdraw it and send the payment to seller to Complete the escrow?

My concerns is the process, the money is being kept... can anyone explain the process of escrow?

 

with REAL escrow, it is placed in an actual insured bank account, that is designed for that purpose...the contract states whether or not it is interest bearing, whether or not the interest goes to the escrow holder, buyer or seller and whether or not funds can be "comingled"

Depending on what it is for (real estate, insurance etc) different federal and state lawas apply

with MOST of the internet sites (Freelance etc) they actually take the money and put it in whatever account they want

The computer keeps track of how much is SUPPOSED TO be in the account, and then notifies the escrow site owner when a request for withdrawal is made

there is little you can do if the escrow holder on a freelance site closes its doors for anyreason.

Your money is not insured or otherwise protected most of the time.

 

I am openning a business and I am planning to run an escrow but what's giving me worry is the fee for transfers...

 

don't forget liability of chargebacks/reversals and fraud

 

yeah, everything is to be considered... escrow is a high risk -low reward business but if needed, then I can decide.

 

I think you will have to really overthink your decision, as said, it is a high-risk business.