How does escrow work for cross-border industrial procurement?
In cross-border industrial procurement, escrow means the buyer commits the full order value to a neutral settlement arrangement at contract signing, and the supplier is paid in tranches only as defined milestones (such as funds committed, quality inspection passed, and delivery confirmed) are verified. The platform administers the milestones but never takes custody of the money — a bank or settlement agent designated by the parties holds and releases the funds.
Escrow exists to solve a standoff: the buyer does not want to pay before the goods are right, and the supplier does not want to build before the money is real. A neutral third party holds the funds so neither side has to trust the other first.
The milestone flow
On MPBxChange the default milestone schedule is 30% on Settlement Arrangement committed, 40% on quality inspection passed against the agreed acceptance standard, and 30% on delivery confirmed. Each milestone has a machine-checkable trigger; funds release only when its evidence is verified. The schedule is customisable per deal — milestones, release percentages, and triggers are all configurable.
| Tranche | Release trigger | What it protects |
|---|---|---|
| 30% | Settlement Arrangement committed | Supplier knows the money is real before starting production |
| 40% | Quality inspection passed (acceptance standard) | Buyer pays the bulk only after the goods meet spec |
| 30% | Delivery confirmed | Final release on receipt |
Who holds the money
The platform is not a custodian. The funds sit in a bank escrow or trust account, a letter of credit, or a direct milestone-payment instruction designated in the contract. The settlement agent — the escrow bank, the issuing or confirming bank, or for direct payment the buyer — effects each release. This keeps the platform out of the money path and keeps the arrangement enforceable under banking law.
- ·Buyer protection: you do not pay the bulk until quality is verified.
- ·Supplier protection: the money is committed before you build, so you are not financing the buyer.
- ·Both sides: the milestone evidence and signatures are recorded in a tamper-evident audit trail.
Frequently asked questions
No. The platform administers the milestones but never takes custody of funds. A bank or settlement agent designated by the parties holds and releases the money under the contract.
Yes. 30/40/30 is only the default. Every deal can set its own milestones, release percentages, and triggers.
The quality milestone does not release. The contract defines the acceptance standard and a dispute path; funds for that tranche stay held until the non-conformance is resolved.