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Kickstarter chooses Stripe as new payments processor

The crowdfunding dropped Amazon Payments after the product it was using was discontinued

Financial trends and news by Steven Loeb
January 6, 2015
Short URL: http://vator.tv/n/3b31

In the ever more competitive world of online payments, with services like Apple Pay, CurrentC, and Square all looking for their chunk of the market, Stripe just made a deal that might just put it ahead of all of them.

That is because Kickstarter, for the first time since it's founding, has dropped Amazon Payments. Instead it has decided to adopt Stripe to collect and process payments on the site, it was announced on Tuesday.

"We've already started moving projects over to the new system, and by next week, it will be in place for all new projects," the crowdfunding site wrote.

For project creators, all this means for them is that they won't have to set up an Amazon Payments business account anymore. Rather, they just need to enter their bank account details on the Account tab when they are drafting their project on Kickstarter. The new process is a lot faster. According to Kickstarter, it only takes about two minutes. The old way of doing things, though, could take a few days.

One thing that is not changing are the fees that come out of a complete project. If a project is successfully funded, Kickstarter applies a 5% fee to the funds collected, and the payments processor will then apply an additional credit card processing fees, which is between 3% and 5%.

Kickstarter also says the Stripe partnership will make it faster for backers to checkout, saying there would "No more being redirected or having to log in to a separate service. It takes half the steps, and it all happens on Kickstarter.”

As for why Kickstarter dropped Amazon Payments, it was simple: despite being " an excellent partner," late last year Amazon discontinued the payments product that Kickstarter had been using, giving the company, 'the opportunity to consider the best possible partner to process payments for creators and backers moving forward."

"After careful consideration, we decided on Stripe. Stripe processes payments for Twitter and Facebook, and we’ve gotten to know their team and product well. We’re thrilled to partner with them."

For Stripe, the benefits are obvious. Kickstarter is the most heavily used crowdfunding site; in 2014 alone it had over $500,000 pledged to over 22,000 projects. In March of last year it reached $1 billion in total pledged dollars. Just like that, Stripe just added at least half a million dollars worth of payments.

This is the second piece of goods news for the company in as many months. In December it raised $70 million from Thrive Capital, Sequoia, General Catalyst, Founders Fund, and Khosla Ventures for a $3.5 billion valuation. 

VatorNews has reached out to Stripe and Kickstarter for further comment. We will update this story if we learn more. 

(Image source: squarespace.com)