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I am currently building a marketplace similar to airbnb/uber for the payment, where sellers would receive payment from buyers once the "service" is completed.

The payment solutions I am considering are Stripe and Braintree. Braintree offers Escrow while Stripe doesn't.

To make the transfer there are thus 2 solutions:

  • with Stripe : create an invoice object with the future date the service will happen/complete and run background jobs checking for that given date that will make the payment once it's happened.

  • with Braintree : use the Escrow functionality.

Is there a better solution in terms of security/scalability? Scheduling the payment date is quite easy but since escrow is supposed to be the marketplace-way, is there really an advantage of using escrow?

stefano_cdn
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  • Hey, have you chosen a gateway? I've been debating with the same question. Is a website (or a platform) which holds funds exclusively for services considered escrow? Escrow, I think, requires ownership and real/personal property. CA has tried to open this concept to cover the internet . If Stripe (which is in CA) can hold money in their connected account, does that mean that they are actually an escrow company? They say they are NOT. Very confusing especially because of the names which were given to similar realities. Could you please give an updated in your question. @agf – user2060451 Nov 01 '16 at 21:23
  • @user2060451 I don't know anything about the legal definition of escrow. If you need more info about how Braintree handles this type of transaction, your best bet is to get in touch with our support team (link in my answer) -- I don't think you'll get an answer here, and it's outside of the scope of Stack Overflow. – agf Nov 02 '16 at 04:21

1 Answers1

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I work at Braintree. If you have more questions about escrow or your Braintree integration, you can always get in touch with our support team.

The advantages of escrow don't have to do with technical security or scalability, though they make make your business less susceptible to chargebacks and other customer complaints, so they make make your business more secure and scalable.

With escrow, the money has already been charged ahead of time, so you don't have to worry about the charge being declined after the service has already been provided. You also don't have to worry about the person receiving the money taking it and failing to provide the service, since they only received the money once it's been completed. Together, these align incentives between the buyer and seller, making fraud much less likely.

agf
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