What's the difference between escrow and a payment gateway?

A payment gateway routes a payment from buyer to seller, usually settling within a day or two. Escrow holds the buyer's payment in a third-party account and only releases it to the seller when delivery or contract conditions have been met. Escrow exists to protect the buyer if the seller fails to deliver — a payment gateway has no such mechanism.

Are escrow services regulated in Africa?

It varies. In Nigeria, escrow providers typically operate under CBN payment service provider licences or as part of a partner bank's regulated structure. In Kenya, escrow is often offered under a trust account model with a regulated bank. Most African markets do not yet have escrow-specific licensing, so providers rely on existing banking, fintech, or fiduciary frameworks.

When should a marketplace use escrow instead of just holding payments internally?

Escrow becomes essential once transaction values rise (used cars, electronics, B2B orders), once disputes are common, or once buyers and sellers are in different countries. Holding funds internally without a clear lock-release-dispute flow leaves the marketplace liable and offers buyers no real protection. A proper escrow flow — with a regulated third-party account and explicit dispute mechanics — is what shifts trust from the marketplace operator to the system itself.

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27 Best Escrow Products in Africa (2026) – Liners

27 Best Escrow Products in Africa (2026)

Last Updated: Jul 26, 2026

Escrow services solve one of the oldest problems in commerce: how do you pay a stranger before they've delivered, or deliver to a stranger before they've paid? An escrow platform sits between buyer and seller, holds the funds in a regulated account, and releases them only when both sides have met agreed-upon conditions. For African markets — where cross-border trade, online marketplaces, and freelance work routinely involve parties who have never met — this trust layer is becoming infrastructure rather than a nice-to-have.

The products in this category typically handle three flows: locking funds at the point of sale, tracking milestones or delivery confirmation, and releasing funds (or refunding) based on the outcome. Some operate as standalone consumer apps for used-goods and peer-to-peer transactions. Others are embedded inside marketplaces, freelance platforms, or B2B trade workflows via API.

Escrow is closely related to but distinct from payment gateways and BNPL. A payment gateway moves money instantly from buyer to seller; escrow holds it. BNPL splits a buyer's payment over time; escrow protects a single payment until conditions are met. A product that briefly delays settlement for chargeback risk is not an escrow product — the buyer must have an explicit right to dispute and reverse the release.

Use this tag for products where escrow is a primary, user-facing feature — not a back-office reserve or float account. Where the buyer and seller both interact with the held-funds state (lock, release, dispute), this tag applies.