Escrow accounts

If you provide Escrow services you either need to be authorised by the FCA directly or become an agent of a firm willing to take on Escrow providers.  To our knowledge AuthoriPay is the only Payment Institution willing to assist such firms.

Escrow services are generally a payment service consisting of the transfer of funds from a payer to a payee, with the service provider holding the funds pending the payee’s fulfilment of certain conditions, confirmation by the payer or confirmation by both parties. An escrow service may be a regular occupation or business activity of a platform even if it represents only a small part of your overall service.

Below are a set of commonly asked questions by firms who are wither new to the Escrow industry or have been operating in it for many years:

Firms who are new to Escrow:

Question: We want to offer escrow services. Can you help?

Answer: Yes. We can support you in one of two ways.

1. We can help you become appropriately licensed and operational so that you can provide escrow services under your own regulatory permissions; or,
2. We can introduce you to one of our licenced partners, allowing you to work with them to offer escrow services under their licence.

Question: We are a small company with limited resources. Will this be a problem?

Answer: No. We regularly work with small firms and early-stage businesses. Our approach is pragmatic and proportionate, and we focus on solutions that are appropriate to the size, complexity and risk profile of your business model.

Question: We are new to escrow and have limited knowledge of how it works or what is required.

Answer: That is not a problem. We guide clients through the process from start to finish, explaining the regulatory, operational and commercial considerations at each stage. Our role is to make the requirements clear and manageable, even for firms with no prior experience of escrow services.

Question: How quickly can we be up and running?

Answer: Timelines vary depending on the structure of your business, the chosen route (own licence or partner arrangement), and how quickly information and decisions are provided. That said, we have a strong track record of helping firms progress efficiently and reach operational readiness as quickly as their circumstances allow.

Question: How experienced are you with escrow services?

Answer: Escrow and controlled funds flows are a core part of our advisory work. We have supported a wide range of businesses operating escrow-style models over many years, advising on licensing strategy, safeguarding, operational design and partner arrangements. This allows us to provide comprehensive, practical support tailored to each client’s model.

Existing Escrow Firms

Question: Do we have the correct regulatory permissions to provide escrow services?

Answer: This depends on how your escrow model is structured. While escrow itself is not a standalone regulated activity, many escrow arrangements involve holding or transferring client funds, which can fall within regulated payment services. We assess your end-to-end funds flow and confirm whether your current permissions are sufficient, whether you are operating under an exemption, or whether authorisation or restructuring is required.

Question: We have been operating for some time. What is our regulatory risk if our permissions are not quite right?

Answer: Operating outside the correct regulatory perimeter can expose firms to supervisory, enforcement and reputational risk. In many cases, issues arise from misunderstanding how escrow interacts with payment services regulation. We help firms identify and address any gaps, remediate historic issues where possible, and put a compliant forward-looking structure in place.

Question: Do we need to safeguard client funds in an escrow model?

Answer: If your escrow arrangement involves holding relevant funds within the scope of payment services, safeguarding requirements are likely to apply. This includes appropriate account structures, reconciliations, governance and oversight. We review your safeguarding position and help design a compliant safeguarding framework that aligns with regulatory expectations.

Question: We use third parties (banks, platforms, agents). Does this create additional regulatory obligations?

Answer: Yes. Outsourcing, agent relationships and reliance on third parties can introduce additional regulatory requirements, including due diligence, oversight, contractual controls and ongoing monitoring. We review your third-party arrangements and help ensure they are structured and documented in line with regulatory expectations.

Question: If we are already live, can you help without disrupting our business?

Answer: Yes. We regularly work with live businesses and focus on proportionate, practical remediation. Our aim is to strengthen your regulatory position while minimising operational disruption, whether that involves formalising existing arrangements, adjusting your permissions strategy, or transitioning to a more appropriate structure over time.

Next Steps

Whether you are planning to launch a new escrow service or are already operating and want to confirm that your permissions, safeguarding and structure are appropriate, AuthoriPay can help. We work with both early-stage and established firms to assess escrow models, clarify regulatory requirements, support authorisation where needed, and introduce suitable authorised partners where appropriate. If you would like to discuss your escrow model or understand the options available to you, please get in touch and we will be happy to advise on the next steps.