Marketplace payments
Sources checked 27 October 2026Stripe does not do escrow. That is why you were rejected.
You described a flow where the money sits somewhere until delivery, you used the word escrow, and the answer came back rejected with no explanation. The thing you want can be built, and it gets approved. It is just not called that, and it is not built that way.
Facts, not opinions
Escrow is a legal term.
Escrow means a neutral third party holds money on behalf of two parties under pre-agreed rules. It is a regulated activity, not a product feature.
Stripe has no such product. More than that, "Escrow services" appears explicitly on their list of restricted businesses, under financial services. Checked on their restricted businesses page, 27 October 2026.
If an account application says you hold money in custody for other people, the request reaches the risk team rather than onboarding. Nobody explains it to you, because risk decisions do not come with explanations.
What you actually want
The buyer pays now. The seller is paid when the work is done.
That is not escrow. It is a charge on the platform and a separate transfer, released on confirmation. Stripe's own documentation calls it separate charges and transfers, it is a documented pattern, and it gets approved.
Buyer
1,000
pays once, at checkout
01 Charge
Platform
1,000
02 Held
until delivery is confirmed
03 Release
Seller
850
gets their share, on confirmation
The split, on release
- Seller 850
- Platform fee 120
- Processing 30
A payout delay is a timer, not a condition.
The first solution everyone reaches for is delaying the payout on the seller's connected account. It looks like it works, because the money really does arrive later.
Except a timer does not know whether the work was done. If an order is cancelled on day two, the money is already in the seller's balance and has to be pulled back out. If the seller has withdrawn it, you recover it from their next sale or not at all.
A transfer on confirmation does not have that problem. Until confirmation the money never left the platform, and a cancellation is an ordinary refund, on a path Stripe already handles.
The practical part
What to write in the account application so it is not rejected.
Describe the movement of the money, not the legal construction. Who pays, who is paid, when each share leaves, and who carries the refund. No terms that sound like a financial service.
| Instead of | Write |
|---|---|
| escrow | the payment is held by the platform until delivery is confirmed |
| we hold the funds in custody | the transfer to the seller leaves after confirmation |
| wallet | a balance shown in the app that reflects real transfers |
| trust account | a charge on the platform, then a separate transfer |
Add the concrete things the risk team is looking for anyway: what is sold, who sells it, what an average order is worth, how long delivery takes, and what happens when it is not delivered. A short, precise description passes more easily than a long, careful one.
A rare detail
There is a way of holding funds.
Private previewCase by case
Stripe describes a feature called funds segregation, which holds the funds of a payment in a protected state before the transfer to the connected account. It is in private preview, and access is requested through your account manager.
I do not build on it and I would not recommend it as your main plan, because you cannot depend on a feature granted case by case. I mention it because it is the only real approximation of what people imagine escrow means at Stripe.
Asked most often
03Three questions, answered in one line each.
- Does Stripe offer escrow?
- No. Escrow is a regulated activity, not a product feature, and "Escrow services" appears on Stripe's own list of restricted businesses under financial services.
- What do you build instead?
- A charge on the platform and a separate transfer, released when delivery is confirmed. Stripe documents the pattern as separate charges and transfers, and it gets approved.
- Why was my Stripe application rejected without an explanation?
- If an account application says you hold money on behalf of other people, it goes to the risk team rather than onboarding. Risk decisions are not explained.
Send me your flow and I will tell you whether it gets approved.
Write me who pays, who is paid, who takes a cut and when the work counts as delivered. I answer the same working day, in writing. Free, and no call.
The facts on this page were checked at the source on 27 October 2026
Or read what I build for marketplaces.