Frequently Asked Questions

Escrow fees are charged on the balance of payments made to Outward’s escrow account. The escrow fee is 0.75% of the escrow payment, with a minimum and maximum dependent on currency selected and whether the trade is international or domestic. For international trades the minimum fee is set at ~US$150, and the max at ~US$1,500. For New Zealand domestic trades the minimum is set at NZ$115, and the maximum at NZ$1,150. If there are multiple escrow payments, the escrow fee for the entire trade is added to the first escrow payment. It is the buyer's/importer's responsibility to pay the escrow fee, however, these can be shared between the buyer/importer and seller/exporter by agreement when setting up a trade. If the seller/exporter agrees to pay a share of the escrow fee, the seller's/exporter's share will be deducted from the final payment to the seller/exporter when the escrowed funds are released. A receipt will be issued to the importer/buyer for the full extent of the escrow fees. When the seller/exporter shares in the fee they are effectively agreeing to a discount on the value of the trade invoice.

Escrow is a process where a third party (in this case Outward and the Escrow Services Trust) acts as an intermediary to ensure both participants to a transaction deliver on their obligations. International Trade: From an exporters perspective: that the importer has deposited the funds for the trade into Outward's escrow account, the funds have been received, and are now available to pay for the goods once the trade documents have been delivered and the goods shipped. From an importers perspective: that the goods have been shipped and required trade documentation delivered to the importer before the escrow payment is released to the exporter. Domestic Trade: From a sellers perspective: that the buyer has deposited the funds for the trade into Outward's escrow account, the funds have been received, and are now available to pay for the goods once delivered. From a buyers perspective: that the goods have been shipped and delivered before the escrow payment is released to the seller. Escrow is an effective method to protect parties against payment and delivery risk.

The funds received from you, are protected and held on your behalf until the trade is completed. All payments are held by Escrow Services Trust (EST), a separate entity to Outward Ltd. EST is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries (in this case the users of the escrow service). The Escrow Services Trust Deed can be accessed on our website here, and along with our International Terms of Use and Domestic Terms of Use govern how client funds are managed. All escrowed funds remain in EST's bank accounts and cannot be used for any purpose other than to be transferred to the seller or returned to the buyer (if a transaction is cancelled). All escrow funds are held in accounts provided by Kiwibank, our banking partner. Kiwibank is a Registered Bank in New Zealand. Outward's systems and EST bank accounts are regularly audited to ensure compliance with EST operating procedures and Outward's Terms of Use.

International Trade: Outward's trade management platform, allows you to enter the trade documents you require to ensure the goods will clear customs and you can pick them up from the port on arrival, including the Bill of Lading or similar confirmation of title (e.g. Telex Release). The escrowed funds are not released to the exporter until you are comfortable the trade documents are correct and you have either a physical copy of the Bill of Lading, or a Telex Release has been confirmed (refer to Outward International Terms of Use for more detail on how the release process works). For land and air based transport a waybill (or similar document) can be substituted for the Bill of Lading as a confirmation that the goods have been shipped. Outward's documentary release process is similar to that used under a traditional letter of credit. Refer to 'How does the documentary release process works' here. Domestic Trade: Outward's trade management platform, allows you to enter the payment instructions, and any other documents you may require to support the trade. The escrowed funds are not released to the seller until you have received the goods (refer to Outward Domestic Terms of Use for more detail on how the release process works).

Although there is technically no guarantee (within the legal meaning), the EST Trust Deed and Outward's Terms of Use operate in practise in a not dissimilar way in that Outward is legally required to comply with the terms of these agreements which require, on the cancellation of the trade, Outward to release funds to the buyer.

Outward's international escrow solution is not dissimilar to a "Sight Letter of Credit", where payment is made to the exporter on presentation of the necessary documents. We are working on trade loan services, which will allow importers to borrow the escrow payment, and make a repayment of the loan at a later date, but these services are not available at this time.

Yes. The structure of the entity (the Escrow Services Trust) that holds the escrowed funds on your behalf provides protection if Outward goes into liquidation. Protections have been put in place to make it very difficult for escrowed funds to be paid to any third parties (such as Outward creditors) other than the relevant buyers/importers and sellers/exporters.

Under a bank letter of credit, the exporter usually needs to prepare all the trade documentation (including obtaining the Bill of Lading) and forward these to the issuing bank for approval. This can only occur after the goods are shipped. If there are any document discrepancies (which happens often) the bank issuing the letter of credit may not honour the payment. In many of these cases the buyer still wants the goods so the letter of credit is amended (usually at both parties cost) and the payment is made. Under Outward's model, the trade documents are uploaded to Outward's platform and shared with the importer. It is the importer's responsibility to approve the trade documents. In most cases (other than the Bill of Lading) this can occur before shipping of the goods. The Bill of Lading can then be forwarded post-shipment, and funds released. This helps to reduce the risk of a trade document dispute or discrepancy compromising the release of funds. If all trade documents are approved pre-shipment, under Outward's Terms of Use, the only dispute can be the authenticity of the Bill of Lading (or other release or title document). If there are other trade documents that cannot be submitted to the buyer until after the shipping date, then Outward provides a messaging system that Users can utilise to agree how these documents will be dealt with. The message system is linked to the trade and may become a complete record of the agreements between the parties if for some reason a dispute occurs.

International Trade: No. Just like a letter of credit Outward operates a documentary release process, meaning payment is made once all trade documents have been approved and received by the buyer (effectively ensuring the goods have been shipped). The goods may still be in transit at the time of payment release. If the goods arrive and there is a quality issue, you will need to take that up with the seller. However, to help protect against product quality issues you may wish to require as a release document condition a third party inspection report and photos of the product pre shipment. Domestic Trade: No, but as the release condition is on delivery you will be able to inspect the goods, prior to releasing the Escrowed Funds. If there is an issue you will be able to suspend or dispute the Trade, which means the funds will remain in escrow until the dispute is resolved in accordance with Outward’s terms of use. In most cases this will be by agreement between the parties. Outward will act to release funds based on the joint instruction from the buyer and seller if this was to occur.

Escrow fees are charged on the balance of payments made to Outward’s escrow account. The escrow fee is 0.75% of the escrow payment, with a minimum and maximum dependent on currency selected and whether the trade is international or domestic. For international trades the minimum fee is set at ~US$150, and the max at ~US$1,500. For New Zealand domestic trades the minimum is set at NZ$115, and the maximum at NZ$1,150. If there are multiple escrow payments, the escrow fee for the entire trade is added to the first escrow payment. It is the buyer's/importer's responsibility to pay the escrow fee, however, these can be shared between the buyer/importer and seller/exporter by agreement when setting up a trade. If the seller/exporter agrees to pay a share of the escrow fee, the seller's/exporter's share will be deducted from the final payment to the seller/exporter when the escrowed funds are released. A receipt will be issued to the importer/buyer for the full extent of the escrow fees. When the seller/exporter shares in the fee they are effectively agreeing to a discount on the value of the trade invoice.

Escrow is a process where a third party (in this case Outward and the Escrow Services Trust) acts as an intermediary to ensure both participants to a transaction deliver on their obligations. International Trade: From an exporters perspective: that the importer has deposited the funds for the trade into Outward's escrow account, the funds have been received, and are now available to pay for the goods once the trade documents have been delivered and the goods shipped. From an importers perspective: that the goods have been shipped and required trade documentation delivered to the importer before the escrow payment is released to the exporter. Domestic Trade: From a sellers perspective: that the buyer has deposited the funds for the trade into Outward's escrow account, the funds have been received, and are now available to pay for the goods once delivered. From a buyers perspective: that the goods have been shipped and delivered before the escrow payment is released to the seller. Escrow is an effective method to protect parties against payment and delivery risk.

Under an escrow arrangement Outward will instruct the buyer to send the agreed payment to its escrow account. Once the payment is received in full Outward will confirm to you the money is being held in escrow to support the trade. The funds received from the buyer, are protected and held on the buyer and sellers behalf. All payments are held by Escrow Services Trust (EST), a separate entity to Outward Ltd. EST is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries (in this case the users of the escrow service). The Escrow Services Trust Deed can be accessed here, and along with our International Terms of Use and Domestic Terms of Use govern how client funds are managed. All escrowed funds remain in EST's bank accounts and cannot be used for any purpose other than to be transferred to the seller or returned to the buyer (if a transaction is cancelled). All escrow funds are held in accounts provided by Kiwibank, our banking partner. Kiwibank is a Registered Bank in New Zealand. Outward's systems and EST bank accounts are regularly audited to ensure compliance with EST operating procedures and Outward's Terms of Use.

It's different because Outward has no incentive to delay payment once the terms of the escrow transaction are complete. EST is holding money on your behalf, and has no working capital, solvency, or cash flow issues that may in the case of buyer's/importer's delay or in the worst case mean a payment is not received.

Although there is technically no guarantee (within the legal meaning), the EST Trust Deed and Outward's Terms of Use operate in practice in a not dissimilar way in that Outward is legally required to comply with the terms of these agreements which require, on the successful completion of the trade, Outward to release funds to the seller.

Outward's international escrow solution is not dissimilar to a Sight Letter of Credit, where payment is made to the exporter on presentation of the necessary documents. We are working on trade credit insurance and trade loan services, which will allow exporters to provide extended payment terms to the importer, but these services are not available at this time.

Yes. The structure of the entity (the Escrow Services Trust) that holds the escrowed funds on buyer's/importer's and seller's/exporter's behalf provides protection if Outward goes into liquidation. Protections have been put in place to make it very difficult for the funds to be paid to any third parties (such as Outward creditors) other than the relevant buyers/importers and sellers/exporters.

Under a bank letter of credit, the exporter usually needs to prepare all the trade documentation (including obtaining the Bill of Lading) and forward these to the issuing bank for approval. This can only occur after the goods are shipped. If there are any document discrepancies (which happens often) the bank issuing the letter of credit may not honour the payment. In circumstances where the bank becomes aware of a credit issue with the buyer, it may choose to utilise a document discrepancy to avoid its payment obligations. In many of these cases the buyer still wants the goods so the letter of credit is amended (usually at both parties cost) and the payment is made. In some circumstances buyers may choose to utilise a discrepancy to negotiate a discount price on the goods that are already in transit. Under Outward's model, the trade documents are uploaded to Outward's platform and shared with the importer. It is the importer's responsibility to approve the trade documents. In most cases (other than the Bill of Lading) this can occur before shipping of the goods. The Bill of Lading can then be forwarded post-shipment, and funds released. This helps to reduce the risk of a trade document dispute or discrepancy compromising the release of funds. If all trade documents are approved pre-shipment, under Outward's Terms of Use, the only dispute can be the authenticity of the Bill of Lading (or other release or title document). If there are other trade documents that cannot be submitted to the buyer until after the shipping date, then Outward provides a messaging system that Users can utilise to agree how these documents will be dealt with. The message system is linked to the trade and may become a complete record of the agreements between the parties if for some reason a dispute occurs.

That is up to your bank. We are working on a solution that will allow an escrow payment to be paid directly to your bank, or financier to support a loan. However, this feature is still in development. We would be happy to work with your bank to try to find a solution that satisfies their requirements. But we cannot guarantee this will be accepted at this time.