Probably a good number of people or businesses have had to give up their initial thoughts of buying a car from abroad or making another purchase for fear that the seller could be unreliable. An escrow account opened for the seller and the buyer by Paysera LT will create more trust between the transaction parties.
Escrow is a fairly common practice in Western countries, used when the buyer is unfamiliar with the seller or supplier.
“There can be many cases when this account can be useful, and probably the most common of them is purchasing a car, real estate, or an Internet domain,” says Vytenis Morkūnas, Paysera LT CEO. – An escrow account is an alternative to an advance payment, which the buyer may not always feel safe paying. We build trust between counterparties by opening a joint account for them to which the buyer transfers the money. Both parties see the money in the account, but cannot use it until they have fulfilled the terms of the agreement. When the buyer confirms to us that the car has been delivered or another service has been provided, the funds are released to the seller who can then transfer the money to their own account,” explains V. Morkūnas.
According to V. Morkūnas, it is expected that this type of account will find its users primarily in Lithuania and Latvia – countries where people often buy used cars from abroad. In 2019, an escrow service appeared on the vehicle trading platform eBay Motors. Such service is also provided by the largest Lithuanian banks, but it is not very popular.
There can be more cases where the service will prove useful.
“Let’s say you’re buying a house or a building where people currently live or businesses operate. Sometimes, even with enough time to move out of the premises to be sold, tenants do so at the very last minute. Therefore, by concluding an escrow account agreement, you can specify the date of transfer of premises and ownership rights, which the seller must implement before receiving your payment,” V. Morkūnas illustrates.
Currently, an escrow account can be opened by contacting Paysera LT at the contact details specified on their website or via the mobile app. In the future, the buyer and the seller will be able to complete all depositing steps through the Paysera online banking or mobile app.
According to the Bank of Lithuania, Paysera LT is the largest electronic money institution (EMI) in Lithuania.
The company provides a payment gateway, money transfers, currency conversion, event ticketing, and other services. About 90 per cent of Lithuanian e-shops use the company’s payment collection solutions. In 2019, transactions made via the Paysera payment system and mobile app amounted to EUR 6 billion, which is EUR 16 million daily. International money transfers are made in 23 currencies and reach 180 countries worldwide. The Paysera companies in Lithuania and Kosovo became the first to be granted EMI licences in those countries.