Learning and development now exceed the traditional classrooms. In the current digital times, access to education and knowledge has become democratised. As the Indian economy strengthens, a growing middle class shows prowess in seeking quality services and access to knowledge. There has been a rapid influx of people seeking education overseas and also taking big-ticket courses domestically. Given the cash inflow and outflow of scale to be taken care of for a seamless experience by the learners and their families, escrow services have come to the forefront for seamless, secure and trustworthy exchange of cash. hence, understanding the role of escrow services in transforming educational transactions.

Escrow services providers are third parties that secure the funds in an encrypted account while ensuring that the funds remain there till the agreed conditions are met by both parties. In simpler words, escrow services secure the funds from the student and don’t release them to the institute until they confirm their enrollment and other necessary access that will impact the student’s candidature at the institute.

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How do students benefit from these services?

Security against fraud: In the virtual environment, open-ended systems have often led to people questioning the trustworthiness towards taking the digital path. Escrow services drive out this fear as they do not transfer the funds to the institutes that do not meet the pre-determined commitments.

Mental security: The funds pooled for education often hold a very high sentiment value, and one must be mentally engaged in it before investing. Knowing that the money is secure and not being mishandled or leading to uncertainty, escrow accounts create a win-win situation for the students.

Resolving disputes: Escrow services help by providing real-time dispute resolution for any escalations and disagreements that may arise between the learners and the institutes.

Ease of bite-sized payments: Escrow allows students to pay in instalments with the escrow provider, who releases funds through their course’s progress.

How do educational institutes benefit?

Heightened trust factor: Using escrow services invokes best practices followed by the institute, which, in turn, potentially helps boost confidence among the students.

Lower risk of finances: Educational institutes can feel assured that the prospective students are financially sound to complete their courses.

Hassle-free payments: Easing cumbersome administrative tasks, escrow services providers aid quick and faster payment processes.

Global reach: As aforementioned, escrow works best with cross-border fund transfers, increasing opportunities to help institutes tap into international students seeking overseas education.

How do escrow service providers facilitate educational transactions?

As part of the initial phase, a detailed agreement is inked between the student and the institute regarding the course, with a detailed overview of tuition fee tenure and other aspects revolving around it. The student then deposits the payment to the escrow account. Following this, the institute confirms their necessary deliveries regarding the student’s candidature and enrolment in the course as per the agreement. Once the conditions are fulfilled, the escrow service provider releases the funds to the institute. As a crucial consideration, students and institutes must look into factors like the fees and reputation of the escrow service.

Escrow services’ future in educational transactions

Given that online learning and development keep growing further in the digital sphere, there will be immense opportunities wherein escrow services will play an active role through educational transactions. Relying on blockchain technology, escrow services are the future in fool-proofing transactions by providing seamless security and transparency to all stakeholders.

To conclude, escrow services will keep playing a vital role in transforming educational transactions by making them trustworthy and increasingly transparent and helping transactional communications become seamless between the students and the institutes.

The writer is Founder and CEO, TransBnk