Icici Launches Escrow Service For Online Deals

With online business-to-business (B2B) sales gradually picking up, ICICI Ltd is launching online escrow services (OES) to facilitate effective, efficient and fraud-free transactions between buyers and sellers of merchandise. ICICI is the first financial intermediary to launch this B2B model of transactions.

The settlement engine of ICICImarkets.com, a financial portal developed and maintained by ICICI to cater to the financial transaction requirements of the wholesale segment, will be harnessed to complete online transactions, including management of all terms and conditions of the contract. The online escrow service is slated for launch shortly.

Once a buyer and seller agree to the terms of a transaction, which includes the sale price of the merchandise, quality, transportation mode and inspection method on receipt of goods, the buyer deposits the value of the transaction in an escrow account maintained with ICICI. Once the payment verification is done, the seller is given the green signal to ship the merchandise by ICICI. The seller further submits tracking information to ICICI, which sees to it that the buyer receives the shipment.

 

The buyer has a set number of days for inspection and can accept or reject the goods depending on the terms agreed upon. Only if the buyer accepts the goods, does ICICI pay the seller.

"In the whole scheme of things, ICICImarkets.com will act as a secure third party to protect the buyer as well as the seller from the possibility of fraudulent transactions and deception," sources said. They added that the Trust accounting and escrow compliance capabilities of ICICI would serve the new service in good stead.

The escrow service fee, which either the buyer or seller may pay or split it among them, to be charged by ICICImarkets.com will typically be a small percentage of the transaction value, sources said.

The benefits that accrue to the customers from the escrow service include increased revenues due to faster transaction cycle times, reduced bad debts adding to profitability for sellers, protection to sellers by verification of funds and protection to the buyers by allowing for inspection of the merchandise before payment.