5 Reasons Why Online Marketplaces Should Embrace Escrow
Online marketplaces have transformed Nigeria’s digital and social commerce spaces. They’ve made buying and selling easier, faster, and more fun, as people can order goods from anywhere, and the vendors will deliver.
However, while these online marketplaces make buying and selling convenient and accessible, they also present some challenges, including difficulty in guaranteeing safe and transparent transactions.
This is because most online marketplaces, such as Jiji, Facebook, Instagram, etc., allow vendors to list their products and services on their platforms while the actual exchange occurs offline. This raises doubt in the minds of the parties involved, as the sellers are scared of delivering goods to criminals who would rob them, while the buyers are scared of making payments to fake vendors who would fail to deliver.
However, the integration of escrow services into these online marketplaces has proven to address this issue effectively. This article discusses why online marketplaces should incorporate escrow services into their platforms to enhance customer trust and loyalty.
Reasons Why Online Marketplaces Should Embrace Escrow
Here are key reasons why online marketplaces should incorporate escrow services into their platforms:
- Increases Trust and Credibility
The major obstacle to online transactions is the lack of trust between the parties involved. And online marketplaces aren’t doing enough to foster trust and increase their credibility. Instead, they connect buyers and sellers and leave them with the burden of figuring out the legitimate ones among them.
This is one of the major reasons online marketplaces must embrace escrow services, as most escrow companies verify the user’s identity before a transaction occurs. They ensure the buyers and sellers provide valid means of identification and also use other means to assess their credibility.
With escrow services, online marketplaces can easily assure buyers and sellers of safe transaction processes. This also positively influences their reputation, as buyers and sellers see them as reliable platforms for safe and secure transactions with unfamiliar people.
- Prevents Fraud
The primary role of escrow is to reduce fraud in online transactions and ensure all parties involved are satisfied at the end. Vendors or buyers with fraudulent intents will not acknowledge the use of third-party escrow services, as they know their schemes will not work.
Online marketplaces should adopt escrow services to eliminate fraud on their platforms. With escrow, the vendors can deliver goods confidently, knowing that their money is already in escrow and must be paid once they fulfill their obligation. On the other hand, buyers can confidently deposit money into the escrow account, as they’re sure the vendors won’t be paid until they deliver the goods or services as agreed.
The use of escrow services ensures both parties involved in a transaction are committed to fulfilling their end of the bargain. This plays a vital role in enhancing the integrity and credibility of the online marketplace.
- Increases Customer Loyalty
Smart online marketplaces understand that providing secure online transaction services earns them the loyalty of their customers. Therefore, instead of following the path of other escrow services that only connect their customers online and allow the exchange of money and goods to take place offline, they provide escrow services to ensure everything is completed online.
By introducing escrow services and securing all parties involved, they get their customers to trust them. And with the increase in trust, the customers become loyal to the company and even convince their friends and family to use the platform.
Customers only go where they’re sure their money and goods are safe, and customer-centric online marketplaces understand this and leverage escrow services to attract these customers.
- Ensures Competitive Advantage
Offering escrow services can give an online marketplace a competitive advantage. This is because customers are more likely to use a platform that guarantees them safe and transparent transactions. Often, the cost isn’t an issue, as these users will be willing to pay more to have their transactions successfully completed than pay less in transaction charges and find their goods or money missing at the end.
With a guarantee of safe and transparent transactions through escrow services, online marketplaces can convince potential customers to choose them over their competitors. And the more customers choose them for their guarantee of safe and transparent transactions, the more customers they attract.
- Dispute Resolution
Most escrow services offer a structured mechanism for resolving disputes among the parties involved. If there’s a dispute between the parties involved in an escrow-facilitated online transaction, the escrow company can mediate and resolve the dispute based on the terms of the escrow agreement.
This is usually a burden that would fall on the online marketplace to address. However, with the escrow service being involved, the burden becomes less on the online marketplace’s customer support officers. With both platforms working together, it’s easier to give every customer a personalized customer service experience, enabling them to become loyal customers.
Incorporate Escrow Services and Watch Your Business Soar
Incorporating escrow services into an online marketplace improves trust, reduces fraud, increases customer loyalty, and improves dispute resolution. It also gives the company a competitive advantage in the industry, acquiring more customers and retaining existing ones.
Smart online marketplaces understand the benefits of an escrow platform and don’t hesitate to adopt the best escrow platforms to give their customers an excellent user experience.
Peppa.io is a reliable online escrow service company that facilitates transparent transactions between buyers and sellers on social media. It provides buyers with a safe way to buy things from social media platforms without being scammed by fake vendors, and also enables vendors to sell more by ensuring their money is safe before they proceed with any delivery.
