What does the term "escrow" refer to in player transfers?

The term "escrow" in player transfers refers to a temporary holding of funds by a third party until specific obligations are met. In the context of player transfers, it typically involves the transfer fee being placed in an escrow account. The funds remain there until both clubs fulfill their contractual obligations related to the transfer, such as the player passing a medical examination or completing the signing of contracts. This helps to ensure that both parties are protected in the transaction and that the payment is only released when all agreed conditions are satisfied. This function of escrow serves to increase trust between clubs and players, minimizing the risk of financial disputes during the transfer process.