Balanced Payments - Difference between Escrow accounts and (Marketplace) Merchant balances?

Question

I'm new to Balanced and was wondering if you could define what exactly an Escrow Account is, and what is the difference between that balance and the Marketplace Merchant balance?

If I am the Marketplace owner person/organization, which represents me? Also, in what cases would my account have a negative balance?

Answer 1

Some basic terminology: In Balanced users are represented by Accounts. Accounts can have two roles; the buyer (users who can be debited), and the merchant role (users who can be credited). Finally there's you, the marketplace, who manages the transaction.

Now, to answer your questions regarding escrow and owner accounts and where fees come from etc:

Transactions generally flow like this (diagram):

buyer --> hold (authorization) --> debit --> marketplace escrow --> credit --> merchant

The escrow balance amount is the sum of all debits minus the sum of all credits. This balance can never go below zero.

The marketplace balance is the sum of all credits to your owner account minus the sum of fees Balanced charges for each transaction. This can go below zero as Balanced charges fees to this account at the time of the transaction. Balanced settles these fees e.g. deducts monies from owner bank account every 7 days.

Note All fees are drawn from your marketplace owner account, not the escrow balance.