Escrow and Payment Safety for Small SaaS and Online Business Sales

A few of our other posts mention this in passing: there's no broker vetting the deal and no escrow automatically included on most micro SaaS sales. It's just you and the other party. That's not a reason to avoid buying or selling a small SaaS — thousands of these deals close without incident — but it does mean payment safety is something you have to set up yourselves, not something a platform handles for you by default.

What escrow actually does

A real escrow service is a neutral third party that holds the buyer's funds in a trust account, separate from both sides, and only releases them once agreed conditions are met — typically, once the buyer has confirmed the assets (code, domain, accounts) actually transferred and work as described. It doesn't verify the seller's revenue or traffic claims for you — that's still your own due diligence — but it removes the single biggest risk in the transaction: paying first and hoping the other side follows through, or handing everything over and hoping payment actually arrives.

Escrow.com: the standard option for this

For domain and website sales specifically, Escrow.com is the long-standing, widely used option — it's a licensed escrow provider with a dedicated service line for domain names and websites, not a general payments app being repurposed for this. The process follows a fixed sequence: both sides agree on terms, the buyer pays Escrow.com (not the seller directly), the seller transfers the domain, code, or accounts, the buyer inspects and approves the transfer, and only then does Escrow.com release the funds to the seller.

What it actually costs

• Deals up to $5,000: 2.6% of the transaction, with a $50 minimum
• Deals from $5,000.01 to $50,000: 2.4%, with a $130 minimum
• International wire transfers may add a flat fee (around $25) to cover intermediary bank charges

Note the minimums — on a $500 sale, a $50 minimum fee is effectively 10%, which is a real cost worth weighing against the size of the deal. Who pays it (buyer, seller, or split) isn't fixed by the service; it's simply negotiated as part of the deal, the same way you'd negotiate price or what's included.

PayPal Goods & Services isn't escrow

It's worth being direct about this, since the two get confused constantly. PayPal Goods & Services gives the buyer dispute and chargeback protection, but it releases funds to the seller right away rather than holding them pending verification — and those funds can later be reversed through a dispute, sometimes well after a seller has handed over a domain or code access. For a seller transferring a digital asset that's hard to "take back," that's a materially different, and generally worse, risk profile than true escrow.

A free alternative: staged payments

For smaller deals where a formal escrow fee doesn't make sense, a staged payment structure gets you most of the protection without the cost: a partial deposit once terms are agreed, the buyer verifying the code and access actually work as described (via read-only or staging access), and the balance paid at the same time full ownership — domain, repository, accounts — actually transfers. It relies more on a clear written agreement and both sides acting in good faith, but it's a meaningful step up from paying everything upfront to someone you've never dealt with before.

When escrow is worth the fee

• The deal size is large enough that the fee is small relative to what's at risk
• Buyer and seller have no shared history or mutual references
• A domain transfer is involved — domains are high-value and hard to reverse once moved
• The deal crosses borders, where recourse if something goes wrong is otherwise limited

When it's probably overkill

For very small deals — roughly under $500-1,000 — the flat minimum fee can cost more, proportionally, than the risk it's protecting against. A well-structured staged payment with a written agreement is usually the more sensible choice at that size, saving formal escrow for larger or higher-trust-gap deals.

See the full handoff checklist for what to transfer, and in what order →