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.

Key parties involved: The buyer, who deposits funds. The seller, who provides goods or a service. And the escrow provider, a neutral party such as LockPesa that holds the funds until conditions are met.

Understanding these three roles is the first step to knowing when escrow is the right tool for a transaction and when it might be unnecessary for a smaller, lower-risk deal.

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 purchase, 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.

If you are new to escrow, start small. Try LockPesa on a modest transaction first, a small online purchase or a short freelance gig, to get comfortable with how deposits, confirmations and releases work before relying on it for a larger deal. Once you have gone through the process once, using it for bigger, more important transactions becomes second nature, and you will likely find yourself recommending it to friends, family and business contacts who are still sending money the old, riskier way.