There isn't really one. If you ask a lawyer, they'll tell you to seek confirmation from the Financial Conduct Authority (the 'FCA'). If you ask the FCA, they'll tell you they don't give legal advice and that you should consult a lawyer.
The differences between escrow services and payment services are many; they include legal differences, structural differences and regulatory differences. In the absence of any particularly clear guidance, different providers interpret the regulations differently.
The legal difference between escrow and payment services is difficult to define. Both involve two parties (a payer and a payee) and an intermediary (either a payment service provider or an escrow agent) who effects the transfer according to the parties' wishes. It might be considered that payment services are 'simpler' or happen 'faster', but these are not legal distinctions and are unhelpful when trying to ascertain the difference.
Escrow transactions are usually (but not always) negotiated separately on specific (as opposed to general or standard) terms and conditions, and those terms are usually only valid for one transaction at a time. Payment services, however, tend to be more 'routine' and take place on standard terms and conditions. This is, of course, a generalisation and, again, not decisive as a way of ascertaining the difference.
Perhaps unhelpfully, the regulatory difference is significant in the United Kingdom. Escrow services are not regulated, where as payment services are. In order to carry out a payment service, a person (natural or legal) must be registered with the Financial Conduct Authority, whereas an escrow agent does not need to be registered with the FCA.
dospay carries out both types of services. It is regulated by the Financial Conduct Authority for the provision of payment services and it also carries out (unregulated) escrow services.
We'd be delighted to tell you how we've ascertained the difference - feel free to contact us for more information.
