Is Paddy an escrow service?
Yes, mechanically. Paddy manages the flow where a buyer's payment is held in custody by its licensed banking partner until the buyer confirms the item is right, then released to the seller. That's escrow. But Paddy isn't built as an escrow service. It's built for the stranger problem, and the difference shows up in where it lives, what it costs, and who has to do the work.
That's the short answer. Here's the longer one.
What does “escrow” actually mean?
Escrow is a simple idea with a heavy name. A neutral third party holds the money while the two sides do what they agreed to do. The seller ships. The buyer checks. Only then does the money move.
It's normally used in property deals, import and export, large contracts, transactions with lawyers attached. That's why most Nigerians have heard the word without ever using it. It sounds like something that happens in an office.
So how is Paddy different from an escrow service?
Three things, concretely.
Where it lives. There's no app to download, no account to create, no dashboard, no login. The transaction happens inside WhatsApp, the same app where the buyer and seller are already talking. Nobody learns a new tool.
Who pays. The seller pays 1%, capped at ₦2,000. The buyer pays nothing at all.
What it assumes about you. Traditional escrow assumes both sides already have contracts, lawyers, and a paper trail. Paddy assumes neither side has any of that, because that's the actual condition of Nigerian social commerce. Two people, one Instagram page, a WhatsApp chat, and a phone that costs more than either of them wants to lose.
Escrow describes what happens to the money. It doesn't describe the problem.
How does a Paddy transaction work?
Five steps.
- 1The seller creates a protected transaction and sends the buyer a link.
- 2The buyer pays into Paddy's payment flow, not to the seller.
- 3The seller sends the item.
- 4The buyer confirms the item is right.
- 5The funds release to the seller.
That's it. No forms, no verification calls, no waiting for someone at Paddy to press a button.
Where does my money actually sit?
Customer funds are held in custody by Anchor's CBN-licensed partner bank. Anchor provides the banking infrastructure Paddy's payment flow runs on, and Paddy operates the technology and rules around payment, confirmation, review window and disputes.
The question underneath this question is usually: can this person just disappear with my money? The honest answer is that the money isn't sitting somewhere the seller can reach. The seller cannot pull it, cannot release it, and cannot mark the item as received on your behalf. Only the buyer's own confirmation moves the money. That's the entire point of the design: the person who benefits from saying “it arrived” is never the person who gets to say it.
Is Paddy licensed by the CBN?
No. Paddy is not a CBN-licensed financial institution. It is a technology company. Its banking partner, Anchor, is a Banking-as-a-Service platform, and customer funds are held in custody by Anchor's CBN-licensed partner bank.
That's worth stating plainly rather than dressing up. Anyone asking you to trust them with money should be straightforward about what they are and aren't.
What does Paddy cost?
1% of the transaction, capped at ₦2,000. Charged to the seller only.
On an ₦85,000 phone bought from a seller in Ikeja, the seller pays ₦850. On a ₦500,000 order, the fee is ₦2,000, not ₦5,000, because of the cap. The buyer pays nothing on either.
That is the lowest fee currently available for this kind of protection in Nigeria. Most alternatives charge both sides, at higher rates, with no cap.
The buyer pays nothing. The seller pays 1%, capped at ₦2,000. That's the whole pricing page.
What happens if the seller doesn't deliver, or the item is wrong?
The buyer doesn't confirm. They raise it instead.
Disputes are resolved within 24 hours. The money doesn't move to the seller while a dispute is open.
So, is it escrow or not?
Escrow is the mechanic. The stranger problem is the category.
Think about what actually happens without something like this. A buyer sees a phone on Instagram. The seller is real, probably. The buyer has three options: send ₦85,000 to a stranger and hope, insist on paying on delivery and watch half of sellers refuse, or get on a bus to Computer Village and check the thing with their own hands.
That third option is the one most people pick, and it's worth being honest about why. Walking down to a market isn't a retail preference; it's an analog trust mechanism. You go in person because standing in front of someone is the only verification you've been offered.
That's a solved problem for the seller with a shop on Otigba Street. It's an unsolved one for the seller whose entire storefront is an Instagram page, and for the buyer three states away who will never stand in front of them. Trusting someone they can't see is what's keeping Nigerian e-commerce small.
Escrow is one answer to that. It's the mechanic Paddy uses, and there's no reason to be cagey about the word. But the thing being built isn't a holding account with a Nigerian flag on it. It's an answer to a much older question: how do two strangers safely trade when neither has a reason to trust the other?
Traditional escrow assumes both sides have lawyers. Paddy assumes neither side has anything but a WhatsApp chat and a hope.
— Rashad, building Paddy
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