Patron payment methods?

crowdmatching

#1

Hello

I have a question related to becoming a patron and the payment method.
Would it be acceptable to use transferwise instead of Stripe?

The rationale behind my question is a s follows.

  • If I use Stripe (or paypal) there are three middlemen actors taking their share of the overall transaction fees:
    • my bank
    • my credit card provider
    • Stripe
  • Exchange fees add to those mentioned above.
  • If I use transferwise, two middlemen are out of the chain and exchange fees are negligible. Both the patron and the receiver would need to have a local account with transferwise. Money is transferred directly from my bank to the receiver’s local transferwise account.
  • I am currently not a registered user with Stripe.
  • I am not happy with paypal because of the reasons mentioned above (add to that some hidden fees as well). So I am looking for serious alternatives.

Ps: payment via a cryptocurrency such as Bitcoin, might be an alternative to transferwise.


#2

This is a complex subject. We have a payment services wiki page where we started capturing research on this. I did a quick rough update just now, but it needs an overhaul.

Could you clarify about the Stripe middlemen list? Here in the U.S., if I pay via Stripe, my bank and credit card provider do not charge anything extra. The CC fees are included in Stripe’s fee. Where you are, do you get extra fees beyond whatever Stripe charges?

Stripe doesn’t register users like Paypal does. Stripe is focused on platforms and developers, giving people a direct experience through the market / merchant. There is no way for a general end-user to register with Stripe.

transferwise…

My impression of it seems excellent and probably a great fit for us. Can you verify if my understanding is right?

  • Projects and patrons each sign up for a Borderless Transferwise account (which requires some identification process)
  • Patrons pledge
  • We at crowdmatch time, we adjust the donation for each patron to be in their local currency
  • Each patron can then give even very small amounts (right? is there a minimum?) to any number of projects, none of which brings any fee
  • Whenever a project wants to access money to use it to spend on something, they get it from their Borderless account, perhaps choosing to transfer with some fee and exchange rate at that time

If Transferwise has the ability for us to tell them through some API to have patrons give projects specific donations, this would all be fine. If donating in local currency has no fees, then there’s no problem with small donation amounts and no need to combine multiple projects into single charges.

Transferwise’s fees seem much better than Stripe, especially if projects can hold money in accounts for extended times and then withdraw larger amounts later for one small fee. And we wouldn’t be in the liable position of holding money ourselves (other than for the Snowdrift project itself).

This seems potentially excellent for us… I fully support going forward with verifying this and figuring out what it would take to support this if it will work as well as we might hope.


#3

Thank you for your time and effort. Let me try to reformulate my thoughts.

  • I live in EU I have to pay accumulated credit card fees twice a year. There is a fee for each transaction of money outside EU. Add to that the exchange rate fee.
  • My credit card is linked to my bank account. So there are account maintenance fees, but no fees for transactions within the EU. My bank would however charge my account for transfers outside the EU.
  • Add to that the charges of Stripe: 1.4% + €0.25 for EU credit cards. I see now that Stripe has better fees than Paypal. Yes you are right, there is no user account with Stripe. Similar to Paypal services you must register a credit card.

I submitted my proposal for Transferwise from a future patrons perspective. So below I’ll shift the perspective to snowdrift coop. I guess that this is my first step in getting involved.

Yes

I might not understand this correctly, so would this be necessary? You don’t even have to know the local currency of patrons. Patrons can handle this transparently in their Borderless Transferwise account.

This might be an issue: in a simulation on Transfewise’s website it looks like there is a minimum of 1 GBP (about $1.60) per transaction. I suggest to clarify with Transferwise if micropayments below 1 GBP are possible. As a side note, Stripe accepts micropayments.

Yes.

Some further points which might need clarification. The following list is a start. I suggest to you add your own issues and to contact Transferwise.

  • If each project has its own Borderless Transferwise account, how would snowdrift coop know the amount each project will receive per month?
  • Would Transferwise be interested in supporting a crowdmatching project even if some patrons would only transfer micropayments? Transferwise will potentially gain many new customers.
  • Is it possible to access and integrate the API of the Transferwise system?
  • What about javascript (proprietary or not?

If it is possible to find an agreement with Transferwise, snowdrift coop might provide a serious alternative road to fund raising for all kinds of FLO projects.


#4

So, crowdmatching means monthly donations vary. And we don’t want to have each month’s donations be just a suggested thing that says, “There are 2,500 patrons, please now donate your $2.50” and then hope that everyone manually does it. Especially across multiple projects, this needs to be reasonably automated and smooth.

With Stripe, we could preauthorize charges so the number of patrons who fail to actually donate in the end is minimized. By authorizing us to charge them, we can rely on the pledges following through to actual donations.

So, if the amount one particular month is $2.53 to project X, how would that work in Transferwise? Can it be set up in such a way that our system can use an API that tells Transferwise to do transactions equivalent to $2.53 in whatever the local currency is for each of the patrons to project X?

There may be some strange ways to do workarounds. If you and I are giving $1 each to both projects X and Y, we could have Transferwise make you give project X $2 and I give project Y $2. But in the case of another patron who has only pledged to project X, we’d have to keep a running balance and charge in arrears later.

We won’t charge patrons via Stripe until their totals get to some amount like $3.57 or around there, because the fixed part of Stripe’s fee means way too high fees if we charged smaller amounts (so, we’ve not yet made any charges since no patron has yet hit that threshold in our alpha state). But our understanding is that Stripe can split up that charge to multiple projects without adding additional flat fees, so there’s thus no per-project minimum.

Would you be up for looking into this? It’s not an absolute blocker to supporting it, but it does make Transferwise less optimal.

If you’re able to investigate farther on the other questions too, that would be great. You’re welcome to also contact them on our behalf. Of course, I or others could too, but there’s lots to do, and I think you understand the situation as well as I do.


#5

OK, I will compile the question list and contact Transferwise on behalf of snowdrift coop.