What is the safekeeping system?
The safekeeping system is any organized method of creating an account that holds funds before the transaction. This process usually includes a third party that acts as an agent of custody; An individual or company that works on behalf of the main owner of the fund. The safekeeping system is most often associated with the purchase of a house, but can be used in any transaction before the actual movement of money. It is also often used in trusted funds that will eventually be responsible for paying for some future negotiations. The concept has existed at least since the Middle Ages, when the funds would be held in the future for third parties for promising secure payments. One of the common examples is a third -party bank or an automated machine. When a person puts funds into their account through these institutions, it is held in the custody account until the transaction is completed. A check or money is given an individual's account and held until it is fully transferred to the desired side.
Another modern example of the safekeeping system can be found in Internet transactions. When purchasing products via online auction sites or individuals and businesses for services provided, money is sent from one side to a third party company. This company holds the money and then releases the desired party. The third party facilitates the transfer and obtains profits from a small fee for use or percentage.
Many security codes and processes are used in the safekeeping system to maintain safety for funds. When dealing with electronic transactions, the custody account is protected by secret encoding, which can only be accessed with one of the two parties. In the world of live transaction, this comes in the form of proper identification, signatures and other normal security. Some safekeeping requires even biometrics such as iris scanning and fingerprints.
The purpose of the safekeeping system, outside of security, is to make money. Third -party companies make it easier for transactione in order to make some money as a profit. This money is usually paid either by the sender or the receiver in the transaction.
Safe fraud is also the main problem for the financial industry. For false financial institutions or individuals, it is relatively common to set up a deficit fraud in an effort to take money from business or person. The money is placed in custody and fraud is completed by money by simply disappearing from a false storage account.