Escrow is one of those financial terms people hear often but rarely have explained in plain language. In simple terms, escrow is an arrangement where a neutral third party holds money on behalf of two people doing business, releasing it only once both sides have kept their end of the deal.

A simple example: Imagine buying a laptop from someone you found online. Instead of sending money directly and hoping the laptop arrives, you deposit the payment into escrow. The seller ships the laptop, you confirm you received it in good condition, and only then is the seller paid.

This simple shift, paying a neutral holder instead of the other person directly, is what makes escrow such a powerful tool for reducing fraud in everyday transactions.

Where escrow is commonly used: Online marketplaces, real estate deals, freelance work, supplier payments, and increasingly, everyday peer-to-peer sales in Kenya.

Every LockPesa transaction is tracked from the moment funds are deposited to the moment they are released, giving both parties a clear record they can refer back to if a question ever comes up.

Before your next a transaction, especially with someone you are dealing with for the first time, consider running it through LockPesa. The small extra step of using escrow can save you from a costly loss.

Escrow is not a new invention, it has protected large real estate and business deals for decades in many countries, handled by lawyers and banks. What LockPesa has done differently is bring that same protective structure down to everyday Kenyan transactions, integrating it with the mobile money habits people already use daily, and removing the legal fees that once made escrow feel out of reach for ordinary buyers, sellers and small business owners.

It is worth remembering that escrow is not about assuming the worst of the other party, most transactions, even between strangers, complete without any issue at all. Rather, escrow is about removing the small but real chance of loss so that both sides can negotiate, agree and complete a deal with full confidence, rather than hesitation. As more Kenyans transact with people outside their immediate circle of family, friends and known business contacts, that confidence becomes increasingly valuable, whether the deal is worth a few thousand shillings or several million.

Take a moment to explain the process to the other party before you begin, since a transaction goes far more smoothly when both sides understand why the funds are being held and when they will be released.