If so, then it is advisable to put the money that will be paid to participants on an escrow it is just a matter of reciprocity because participants are also doing their works for it, the participants will be at a disadvantage if there's no assurance they'll get paid.
That would be the best thing to do, but I think the one he mean is he will pay when the signature codes is done since there are so many scammers around and if this the case I think it's reasonable reason but if the designer will doubt then they should talk about securing the funds to the escrow so that the designer can assure to get the payments after the job is done.