Escrow (Treuhand)
Escrow is a payment model where a neutral third party holds the buyer's payment until a defined condition is met — e.g. delivery of the goods or acceptance of the service.
Escrow (Treuhand)
Escrow (escrow account) is a security mechanism in payment transactions: A neutral third party — the escrow agent — holds the buyer's payment until an agreed condition is met. Only then is the amount released to the seller. This protects both parties: You, the buyer, do not pay without receiving the service, and you, the seller, have the guarantee that the money is ready.
On marketplaces, escrow is particularly used for services and high-value goods: handyman orders, freelancer projects, used car sales or real estate transactions. Release occurs after delivery, acceptance or expiry of a return period.
In Switzerland, escrow is regulatory sensitive: Anyone who holds funds on an escrow account on a commercial basis may fall under banking regulation (60-day rule according to BankV). For SME marketplaces, the combination of delayed payout and split payment via a regulated PSP is the practical alternative to a classic escrow.
Escrow examples
A buyer commissions a craftsman via a marketplace. The amount is kept in escrow until the buyer has approved the work.
A freelancer marketplace holds the client's payment until the project has been delivered and approved by the client.
A PSP offers Delayed Payout: The payment is processed immediately, but the payout to the seller is only triggered after shipping confirmation — an escrow-like function without regulatory overhead.
Escrow FAQ
What is Escrow?
Escrow is a fiduciary model in which a neutral third party holds the payment until a condition is met — e.g. delivery or acceptance. This protects buyers and sellers alike.
Is escrow regulated in Switzerland?
Yes, if you hold funds on escrow accounts on a commercial basis, you may fall under banking regulation. The 60-day rule of the BankO is relevant here. SME marketplaces are better off using Delayed Payout via a regulated PSP.
What is the difference between escrow and split payment?
Split Payment splits the amount immediately. Escrow holds the entire amount back until a condition is met. Escrow provides stronger protection for services and high-value goods, but is regulatorily more demanding.
When is Escrow worth it?
For services (acceptance required), high-value goods (risk minimization), used goods (condition check), and project work (milestone payments). For standard goods with shipping tracking, Delayed Payout is usually sufficient.
