8 January 2015 | 28 Comments
I returned from my trip to Oakland for my crowdfunding book to learn that some big news had dropped: As of next week, Kickstarter will no longer be using Amazon Payments. Instead, they’ll be moving to Stripe, a payment processing system similar to PayPal.
It’s important to note that it sounds like Kickstarter didn’t have much of a choice but to find a different payment processing company. They say in that update, “Late last year Amazon decided to discontinue the payments product that we have used.” That’s out of Kickstarter’s control, and I’m sure they did their due diligence in finding a new partner.
Is the move good for backers?
Short answer: It’s probably neither good nor bad.
Long answer: For the most part, the move probably won’t make Kickstarter better or worse for backers. Stripe is just as secure as Amazon Payments, and the checkout process might actually be faster with Stripe, as you don’t have to connect to both Kickstarter and Amazon.
Update to previous concern: Stripe does give you the option to save your credit card info in their system, making it quick and easy to click through future pledges, or not save it (if you’re worried about security).
Is the move good for creators?
Short answer: Not really.
Long answer: I was really hoping that the change to stripe would decrease the percentage that creators were charged at the end of a project (Amazon used to charge 3-5% depending on the size of each transaction). In fact, that alone would have swayed every single creator to support the change. But they didn’t–the charge is the same.
Kickstarter emphasizes that the new system will make it much easier for creators to link their bank account to Kickstarter. Now there’s no need to open an Amazon business account, which saves time. That’s good.
But here’s the bad part: Backers are comfortable with the way Kickstarter has handled payments up to this point. Stripe is less of a known entity–how are backers going to feel when they’re asked to enter their credit card number instead of clicking through to Amazon as they’ve done so many times? Some won’t think twice about it, but others will hesitate. That’s not good for a project creator.
As creators, one of our biggest roles is to gain and maintain backers’ trust. The familiarity of Kickstarter is a big part of that. My hope is that in a few months, we’ll see that the Stripe process is so streamlined and easy that no one will hesitate for a second to back a project.
Until then, I’m a little nervous about it.
Also, a new podcast episode of Funding the Dream went live today! Even though it was recorded last month, it’s about various changes that Kickstarter underwent last year and how Richard and I think Kickstarter will continue to evolve. I got to meet Richard for the first time when I was in Oakland, and I have to say that he is just as genuine, kind, and intelligent in person as he is on the podcast.