Escrow is going big

Escrow is going big just announced Shopify is making it an official payment option. Shopify is one of the largest e-commerce platforms in the world, so this proves escrow is a growing trend. As buyers and sellers become more aware of the unbeatable protection that escrow provides, they will increasingly use escrow to eliminate risk from their e-commerce transactions.

What did announce? sent an email blast to its users on March 14, 2024:

We’re thrilled to share exciting news: will soon become a payment option on Shopify! is not just another payment service provider; it’s your key to unlocking high-value transactions on your Shopify store. Imagine selling items like:

• Collectibles: Rare coins, vintage stamps, or limited-edition memorabilia.
• Luxury Cars: Whether it's a classic Porsche or a sleek Tesla, ensures a secure sale.
• Fine Art: From classic masterpieces to contemporary paintings, every transaction is protected.
• Digital Assets: Domains, websites, or online businesses— handles it all.
• Software Licenses: Safely transfer licenses for software, apps, or plugins.
Heavy Machinery: Construction equipment, industrial tools, and more.

Why is escrow useful in e-commerce?

Escrow is incredibly useful in e-commerce because it completely eliminates risk and worry, and even enables transactions that otherwise would not occur.

Generally, in e-commerce transactions where the seller is not a well-known business, the buyer and seller are total strangers. They don't know if they can trust each other. The buyer doesn't know if, after paying, he will suffer non-delivery from the seller. The seller doesn't know if, after receiving payment, he will suffer a chargeback from the buyer. These are serious problems, and they affect almost all e-commerce transactions.

There is only one way to confidently solve both problems: escrow. When the buyer sends the payment to an escrow service, there is no concern with non-delivery from the seller. After the seller receives the funds from the escrow service, there is no concern with chargebacks from the buyer.

Why isn't escrow more commonly used?

That's a good question. Even CNET has pondered that, saying: "Despite the rise in online auction fraud, few users are taking advantage of escrow services, the one sure-fire way to protect themselves."

We believe there are a few reasons escrow has been uncommon in e-commerce historically:

  • Most buyers and sellers aren't aware escrow is an option.
  • Most sellers don't want the burden of supporting a non-standard payment option.
  • Many buyers are using alternatives for buyer protection.

As more people become aware of escrow, and more e-commerce platforms add escrow as a standard payment option, it will become far more frequently used in relation to the alternatives.

What are the alternatives to escrow?

Escrow is a combination of buyer protection and seller protection. Any services that offer one or the other could be an alternative to escrow. Most notably there are "chargeback insurance" products and payment platform "buyer protection" policies.

Possibly the most widely-used form of buyer protection online is PayPal Goods & Services (G&S). It's slightly different from escrow, being basically a combination of insurance and clawbacks, but it costs approximately the same as escrow ( costs a bit more, GunTab costs a bit less).

One problem with PayPal G&S is that it lacks sufficient seller protection. Sellers generally remain exposed to chargebacks and losing claims made by the buyer.

Another problem with PayPal G&S is that it prohibits a wide range of transactions, including "ammunition, firearms, or certain firearm parts or accessories". The only similar offering, Venmo G&S, has the same prohibitions.


Escrow empowers strangers to conduct high-dollar transactions together across any distance, without the massive financial risk that would otherwise involve. It even makes transactions possible that would otherwise be impossible.

Buyers and sellers are becoming more aware of the power of escrow, and are increasingly using it for mutual purchase protection. Witnessing that, major e-commerce platforms are adding escrow services as standard payment options. While escrow may not have been very common in the past, it will clearly be a popular payment method in the future.

If you want to protect yourself as a buyer or seller, especially for high-value transactions, you should be using an escrow service like or GunTab.

Editor's note: Both and Shopify prohibit firearm-related transactions. Gun-friendly alternatives include GunTab and BigCommerce.