Key points
- Paying via a trusted third party means handing the price to a neutral intermediary who releases it to the seller only once the agreed conditions are met.
- Under French law, the mechanism has a name: conventional escrow (articles 1956 et seq. of the French Civil Code).
- With a lawyer, the funds are ring-fenced on a CARPA account, outside the firm's assets, and every movement is checked.
- The seller knows the money exists; the buyer knows it will not leave without something in return.
- Always check the third party's identity: fake "secure payment" websites are a classic scam.
The dilemma of who pays first
Every sale runs into the same question. If the buyer pays first, they risk never receiving the goods. If the seller delivers first, they risk never being paid. Between strangers, at a distance or for a large sum, neither party has any reason to accept that risk. Payment via a trusted third party removes the dilemma: the price leaves the buyer but reaches the seller only when the transaction is actually completed.
The principle: a price on hold with a neutral party
Legally, payment via a trusted third party rests on conventional escrow: the parties hand a sum to a third party who undertakes to hold it, then return it to whichever party is entitled to it (article 1956 of the French Civil Code). The buyer is the depositing party; the seller, the beneficiary. The third party takes no side: it performs the escrow agreement, nothing more, nothing less.
The vocabulary varies from one country to another, but the logic is the same everywhere: a third party holds the funds and releases them only once the conditions precedent set in advance are met.
The steps of a payment via a trusted third party
- The parties sign an agreement setting the amount, the release conditions, the deadline and what happens to the funds if the deal fails.
- The third party checks the parties' identity and the source of funds (KYC and anti-money laundering).
- The buyer transfers the price to the dedicated account; the seller receives confirmation.
- The seller performs their side: delivery, handover of documents, signing of the deed.
- Once the conditions are met, the third party releases the price to the seller; otherwise, it returns it to the buyer as agreed.
Who can act as a trusted third party?
Several players share this role in France. The notary holds the funds for the deeds they execute, particularly in real estate. A commissaire de justice can also be appointed. Online payment platforms offer escrow services for sales between private individuals; handling funds on behalf of others then in principle requires authorisation from the ACPR, the French banking supervisor, or acting on behalf of an authorised institution. For a comparison between professions, see our article on escrow with a lawyer or a notary.
The lawyer has a particular advantage: a French lawyer may handle client funds only through the CARPA. The sums are ring-fenced on a sub-account dedicated to the transaction, outside the firm's assets, and the CARPA checks the purpose and beneficiary of every payment out. Professional secrecy, ethics and the profession's liability insurance come on top. Details are in our article on the safeguards of the CARPA account.
For which transactions?
Payment via a trusted third party is the natural choice whenever the amount is large, the parties do not know each other or the counterpart takes time: sale of shares or of a business, purchase of a yacht, sale of a classic car or an artwork, transfer of digital assets, settlement agreement ending a dispute, transaction between parties in different countries.
What the third party does not do
A trusted third party is not an arbitrator. If the buyer disputes the conformity of the goods and the seller claims the price, it does not decide: it holds the funds until joint instructions or a court decision. That is precisely its value: neither party can obtain the money alone. Hence the importance of a precise agreement on release conditions and evidence; see the key clauses of an escrow agreement.
The fake trusted third party trap
Fraudsters have understood the appeal of the mechanism. The scenario is well known: the "seller" insists on a secure payment website the buyer has never heard of, with a reassuring logo and an address close to a genuine service. The funds go straight to the fraudster. A few reflexes are enough: choose the third party yourself, check that it exists through an independent source (bar directory, ACPR register), never follow a link sent by the other party, and make sure the destination account really belongs to the third party.
How much does payment via a trusted third party cost?
Consumer platforms usually charge a percentage of the amount. An escrow lawyer sets fees according to the amount, the duration and the complexity of the agreement, and the cost is often shared between the parties. Compared with the risk covered, it is modest. For an order of magnitude, see how much an escrow agent costs.
Frequently asked questions
What is a payment via a trusted third party?+
A payment in which the buyer hands the price to a neutral intermediary, who passes it on to the seller only once the agreed conditions are met. Under French law, it is a conventional escrow (article 1956 of the French Civil Code).
Who can act as a trusted third party?+
A lawyer, who must operate through the CARPA, a notary, a commissaire de justice, or a payment platform authorised by the ACPR or acting on behalf of an authorised institution.
Is the money safe with a lawyer?+
Yes. The funds are deposited on a CARPA sub-account dedicated to the transaction, outside the firm's assets, and every payment out is checked by the CARPA.
What happens if buyer and seller disagree?+
The third party does not settle the dispute: it holds the funds until joint instructions from the parties or a court decision.
How can I spot a fake trusted third party service?+
Be wary of a website imposed by the other party or received through a link. Choose the third party yourself and check that it exists through an independent source, such as the bar directory or the ACPR register.
Does payment via a trusted third party work internationally?+
Yes. The funds can be received by international transfer; the agreement then specifies the governing law, the competent court and the currency.
A transaction to secure?
Fidens sets up the escrow of the price on a CARPA account, under the responsibility of a lawyer.