I am currently in the idea stage of an online escrow service where users will buy and sell used mobiles and to ensure security we will provide escrow services. I want to know the legalities involved, how to approach banks to open an escrow account, how to manage the escrow account and the transactions. Thank You.
An escrow service is a regulated business, meaning that you have to hold an escrow license in your jurisdiction in order to operate. That's the bad news.
The good news: Escrow.com offers an escrow service to marketplaces as an API. If you build a platform for buying and selling used mobile phones, you can easily plug in the Escrow.com API and start doing escrow transactions immediately. Send me an email or a PM and I'll send you some more info.
As Jackson states, in most countries online escrow is heavily regulated by Government.
So in most regions, it is best to use an established escrow service - check your Government's regulations.
In Europe, for example, all online marketplaces that handle payment now have to either use a Government regulated service (or become regulated themselves at a cost of tens of thousands of Euros or more).
Fortunately, Transpact.com offers an easy to use, efficient and ultra-low cost API to make escrow payment simple and automatic.
Unless you speak to an attorney, no one can advise you on the legalities. To do so would be practicing law without a license.
There's a glaring issue with your premise for your business that warrants thought on your part. You want to be "just like ____" and that's a rookie mistake. In order to succeed in business, you need to differentiate yourself from others, not compete with them. Perhaps you meant that you'd like to be in that industry. But think of solving a problem with those transactions that the other company has not. Or provide a different level of service. If your basis for attracting customers is a word that ends in -er (better, faster, cheaper, etc.) try again. What can you be the first, best, or most?
The banks will tell you what's required. If you're going to be in a regulated business, you will need an actual attorney, even if not on staff, at least on-call.
I tried escrow.com
During the evaluation process I figured out that the business service is not exactly what our clients expecting.
Their service fees as well on the high side (most expensive of all services we evaluated) and there is no possibility to participate on the revenue you generate for them on your website. Nevertheless their API is well documented and there is a sandbox system to try out the funtionalities.
Further Escrow services are:
and many more...
try search escrow service api on Google
Jackson Elsegood, could you provide me your email address, your profile is hidden.