Kickstarter Adopts Stripe Payment System: What Does This Mean for Creators and Backers?

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.

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28 Comments on “Kickstarter Adopts Stripe Payment System: What Does This Mean for Creators and Backers?

  1. I think there will be some hesitation, but those who want to participate will eventually get back into it. I might anticipate a moderate percentage to delay sponsorship for a few months, but once they find a project they want to back, they will adjust. I definitely paused because it was inconvenient to add my credit card into into another service, but there is a board game that I want to back so it didn’t slow me down much.

  2. As a backer based in Germany I never heard of Stripe and I won’t enter my credit card data to yet another site. Sorry. If they had offered options… Paypal or Amazon or Stripe.

    As you said: It was a no brainer. Amazon has my payment data and I thrust them (more or less).

    Online I only pay using Paypal and Amazon payments and I won’t change that.

    Sorry for all the projects. I’m not happy with this situation.

  3. If Kickstarter holds on to your credit card information, I’d encourage everyone to enable the two-factor authentication feature found in the Security section of your Kickstarter Account settings. It doesn’t mean your credit card information is safe, but it provides another hurdle for people to jump over to gain access to your information.

  4. Of course – but you don’t have to go set it up manually, and manage that other account :)

    We switched away from PayPal to Stripe for payment processing where I work (www.youneedabudget.com), because they are cheaper, and much nicer to work with.
    They aren’t a tiny company, but because most people won’t ever realise they are using Stripe (because the payment happens in-situ), they aren’t well known outside of those who actually implement their APIs.

  5. I probably will stop backing. I was already leery of backing non-US ks projects because of having to enter my card info. Now I’m being asked to trust a difference company when I read about yet another company getting hacked and CC details getting stolen?

    No thanks. I was comfortable with Amazon because I know about their security, and know they do a lot to keep my CC info secure. I don’t know Stripe, andI don’t trust them. Maybe if they had gone with PayPal.

    In a few months or so when I’ve had time to do research on them and feel better about due diligence, but for now this is going to put a hold on my backing.

    I’ve done work in infosec before, as a security admin for an etailer, and even 15 yrs ago it was a constantly shifting landscape of threats. Now? Yeah, if your info is online, it’s only a matter of time, and the fewer places that have your info, the fewer sites to worry about.

  6. This is actually exciting news for me and any other former (and/or future) creator who also happens to have a storefront via a SquareSpace website, as they too use Stripe as the payment processing center. The comments regarding the loss of Amazon certainly resonate with me, as well, given their nearly decade-long existence and the ease with which we currently make other purchases. Anyway, along with SquareSpace and hundreds (if not thousands) of other businesses, Microsoft also uses Stripe…quite competent indeed.

    Cheers,
    Joe

  7. I was used to Amazon as well. It’s a well known company everywhere. However I have never heard of this new one before, I’m from Europe. As for me I also wished they would give the possibility to use PayPal. I’m sure it won’t stop me from backing projects I’m looking forward to but I am not looking forward to making a new account somewhere with a company I never heard of before.
    Change is not always a bad thing but in this case I wish they would have picked a payment option that is more well known around the globe.
    And I already can say it will influence my backing of projects after it gets implemented. I’ll eventually surrender and make an account but this switch will have the effect of me passing up on some projects which I would have backed otherwise.

    1. Wouter: That’s a good point–I wonder why they didn’t have PayPal bid against Stripe. Perhaps they did, but if so, I would think the end result would have been a lower fee for creators.

  8. It’s funny, we just finished recording a podcast segment on this very issue just as this email popped up in my browser! I for one am ambivalent about the move. Stripe may be unknown, but their security is just as good, plus they have been involved with a lot of other big companies such as Facebook and Twitter, so it’s likely they know what they’re doing.
    Is the slight speed up of payments a draw? Not really; it wasn’t slow before and as long as they don’t request your card details every time to check out, it’ll be much of a muchness. I’d be more excited if they dropped the Creator fees, but since this isn’t the case I just don’t feel very excited by this change, for good or bad.

  9. Not looking forward to another payment processing system. I already have an Amazon account and that made payments easier. I understand Amazon is killing that program, so it’s not Kickstarter’s fault, but I wish they’d gone with the more standard Paypal as at least one option and let the consumer decide which works best for them.

    I don’t know Stripe or have a relationship with them. Now in order to use KS, I have to create an account with some new company. It’s different than a retail store who takes your credit card, runs it through the processing system of their choice, and the consumer is insulated from the process. If a store changes processing, the consumer never knows nor cares. But in this case, their limitation of a single payment system is foisting an unwelcome change on everyone. They should use this opportunity to simply give several options instead of just one.

    I’m sure that some project will come along to make me begrudgingly pay the piper and create a Stripe account… but like today I jumped in a project at the $1 level on a whim, because I already had my Amazon information loaded and ready to go. I was able to do this with no hesitation. Now those support moves will be on hold until such time as I cross the narrow bridge KS has chosen for their benefit, not the consumer.

  10. Wow, interesting move on Kickstarter’s part not to decrease the amount they charge project creators, considering stipe usually charges 2.9% to .30. I am not a fan of Amazon payments and am personally excited for the change both as a creator and a backer. I don’t think that Stripe will scare backers away. I use them for my website (questscouts.com) already, and they work well. I think that the population who uses Kickstarter won’t really be scared away by a new platform IF (and this is a big if,) Kickstarter integrates the change seamlessly. Fingers crossed. I almost want to go find a project to back just so I can experience the new system. (Although it’s not like I go all that long without backing a project. Also, Tiny Epic Galaxies is live today… Excuse me, gotta go!)

    1. Dylan: Yeah, I was thinking the same thing! Why not remove the ambiguous “up to 5%” part and just call it a flat 3%? Odd.

      But my hope is the same as yours, that the change won’t scare anyone away.

      1. They are probably just covering themselves here if Stripe takes a different percentage for different countries, or if the fees change over time (Kickstarter may be able to negotiate better fees after a while).

  11. Stripe’s fairly huge already – there’s a good chance you’ve used them to purchase something already, so they may already have your details there.

    From a software-development point of view, this is a no-brainer. Stripe have an amazingly simple process to hook up the code, and you get the benefit of their form getting updated to be easier to use automatically. It also works inline, so you don’t have to go to another page to make the payments. On most websites, each step in the payment process reduces the number of people who make it through to the end (one more chance for things to break, one more chance to second-guess your payment).

    I think this is pretty much a no-lose situation.

  12. As a backer there was a moment of concern when I heard this news. Using Amazon to back a project was a no brainer, they already had my credit card information, I use them all the time and there was an already built in level of trust. Stripe however is an unknown quantity without that already established trust factor.

    After thinking about it though I don’t think there will be any difference in my backing habits, I’ve already backed projects not based in the U.S. and had to provide credit card information to Kickstarter not through Amazon and I imagine using Stripe will be much like that, an initial moment of hesitation and then I’ll back anyway.

  13. As a heavy backer, I look forward to the change. Currently, in non US projects, KS asks for the CC every time and uses an unknown entity to process payments, but it’s all handled within KS itself – which has always felt odd to me.

    Now, with Stripe, and the growing countries they operate in, the checkout process should be a lot more consistent with US and non-US projects. Stripe has the capability to store transaction and customer tokens, a one-click-to-back transaction could be completely doable and would actually be simpler than the current Amazon transaction with the separate log-in.

    I think creators will like the Stripe management a lot more, at least that’s been my experience with most of the PledgeManager folks who’ve been using Stripe with us.

    1. Adam: Thanks for your thoughts. Those are great points. They’re contingent upon Stripe not asking for our credit card every time we back a project–I heavily suspect that will be the case, but I’m waiting on verification.

    2. Do we know if this will be used for projects outside the US rather than the current system? Or even why projects outside the US used to have a different payment method from the Amazon system for projects based in the US, I don’t think I’ve seen an actual explanation for that…

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