A paymaster, or deposit agent, acts as a neutral third party in a transaction between individuals, entities or companies: it receives funds from the buyer into an escrow account and releases them to the seller according to the contract’s instructions.
The instructions are set out in a sale and purchase agreement (SPA) or service agreement. After deducting the agreed fee, the paymaster reconciles the escrow account.
Placing funds with a trusted, neutral third party reduces risk for both buyer and seller: the seller knows that sufficient funds are available, and the buyer receives title to the asset.
When it is used
Our paymaster services are commonly used for transactions involving goods, products or commodities that typically involve large sums, to facilitate payments and the release of funds. They are also one of the most effective ways for intermediaries to make sure they receive the commissions and fees agreed by contract – far safer than a simple agreement between the parties.
The paymaster is not a party to the transaction and is not authorised to disclose the identity of the parties. Its responsibilities include periodically checking the escrow account to confirm that payment has been made, and releasing funds according to the instructions received.
With the support of our in-house legal office, we often act as paymaster using fiduciary accounts, which provide an additional safeguard when handling large sums. We offer escrow agent and paymaster services to individuals, businesses and companies worldwide.
Important: KYC and anti-money laundering checks
International anti-money laundering rules require financial institutions, deposit agents and paymasters to verify and record beneficial ownership information for the legal entities involved. This protects all parties and ensures that the transaction is neither fraudulent nor unlawful. To start the process we therefore require:
- a copy of a valid identity document or passport;
- IRS form W-9 for any US citizens or companies involved;
- IRS form W-8BEN for any non-US individuals or companies involved;
- a copy of all transaction documents, including payment agreements;
- any other documents needed for a complete Know Your Customer (KYC) due diligence.
In these transactions time is precious: providing the requested information promptly makes the process faster, smoother and safer.
