6 ms·

Crowdfunding is too expensive

57 points by shawnee_ 12y ago

PaulHoule 12y ago
Given the business model of credit cards, where the banks eat losses due to fraud, there is some justification for a percentage of the transaction since the liability involved in a $1000 fraud transaction is much greater than that of a $10 fraud transaction. In some other business model that might not be the case, but on that kind of platform you might have much stronger technical and procedural protections against fraud so it might be like PayPal where if you do anything that is even slightly sketchy (i.e. a crowdfunding campaign) you get kicked.
- dangrossman 12y ago
  A bit tangential to your point, but... banks generally don't eat losses due to common credit card fraud (a stolen/cloned card number being misused). When you call your bank and say that some charges on your card were unauthorized, and they give you back that money, it immediately comes out of the bank accounts of the stores that made the charges. They are paying for the reversals, not the card issuer. Each of those stores also pays a significant chargeback fee, which more than covers the cost of that customer support agent that took the call, and reissuing the physical card if necessary. Plus, much of the transaction fee goes to paying out rewards to card holders and to the processing networks that make everything work (e.g. VisaNet), rather than to the banks' profits. That reflects the fact that the banks generally don't have significant fraud losses to cover. The cost to banks from reissuing cards after massive data breaches at major retailers is a relatively new phenomenon and isn't priced into those fees.
  - toomuchtodo 12y ago
    Could crowdfunding sites require ACH transfers instead of credit card network processing, thereby substantially reducing their processing fees?
    - dublinben 12y ago
      Dwolla has been working on a better interface for that, and their transaction costs are far lower than anything mentioned in this article.
      - toomuchtodo 12y ago
        I'm aware of Dwolla, but unsure why an additional middleman is required. Direct ACH transfers cost 15-20 cents/transaction, and Dwolla isn't required to do that, just a bank that supports you submitting properly formatted text files.
  - corbet 12y ago
    That actually depends. Online sites, like the one I run, get to pay chargebacks and the associated fees ($10-25, in my experience). The situation is different for card-present transactions, though; in that case, the merchant is usually covered.
Avalaxy 12y ago
I hope we will see more crowdfunding websites adopt Bitcoin. It allows projects to get a lot more money because basically all of the money could go to them.
- Marazan 12y ago
  Apart from, you know, the Bitcoin transaction fees. Plus the fees to convert money into Bitcoin.
  - illumen 12y ago
    Plus fraud costs.
    - lightlike 12y ago
      what fraud costs? please elaborate
    - yebyen 12y ago
      What fraud costs? Bitcoin transactions are (basically) irreversible. You either received them or you didn't, and if your policy is to allow refunds to your customers (when they report a fraud or for any other reason) then all you have to do is send it back. So, what fraud costs?
  - lightlike 12y ago
    bitcoin transaction fees do not depend on the amount transferred. for a standard p2pk transaction of any amount the fee is less than 50 cents https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees
    - mike_hearn 12y ago
      Less than half a cent, actually. Many people pay more than they need for no real reason.
- ig1 12y ago
Svip 12y ago
I wonder if the typo in the HN submission (crow instead of crowd) was intentional.
- dang 12y ago
  Thanks, we missed that one.
dictum 12y ago
Obligatory non-US HNer snark: I wish I my credit card processing rates were 2.9% + 30¢ expensive, not 8.9% expensive.
a_c_s 12y ago
The overblown rhetoric used makes this piece hard to read. For example, charging a rate that the market will bear for a product like payment processing is simply the free market, not some kind of 'evil' practice.
- rqebmm 12y ago
  True, but it is a LITTLE suspicious that they all charge exactly the same amount despite competition in the space.
  - msherry 12y ago
    They can only go so low. Here's a pdf of Visa's interchange rates: http://usa.visa.com/download/merchants/visa-usa-interchange-reimbursement-fees-april2013.pdf http://usa.visa.com/download/merchants/visa-usa-interchange-... . (Mastercard is similar, and Amex is even more expensive.) It's 10 dense pages of tables, but it essentially sets a lower bound on the pricing you can get from one of the companies discussed in the article. Everyone would love to see the card networks lower (and simplify) their fees, but that's not what's being railed against in the article.
    - mtmail 12y ago
      The European Commission is planning to cap (VISA, Mastercard etc) card fees to 0.2% of the transaction. http://www.businessweek.com/news/2014-10-31/eu-bid-to-limit-card-fees-poised-to-win-nations-backing http://www.businessweek.com/news/2014-10-31/eu-bid-to-limit-...
- munificent 12y ago
  > simply the free market This is a common misconception. A market is only "free" to the degree that it is perfect[1]. I hope we'd all agree that payment processing is nowhere near a perfect market. The barriers to entry are quite high. It takes a huge amount of lawyers and regulation wrangling to get a new financial startup up and running. Consumers certainly do not have clear information or free choice about which payment processor to use. I'm sure there are other things making this area far from perfect. I like the idea of the free market, and it seems to work tolerably well for a lot of things, but I really get frustrated by this idea that it's a magic bullet. Free markets are pretty great for determining prices for brain-dead simple physical commodities that are simple to produce. As soon as you start straying from that, they very quickly become inefficient. [1]: http://en.wikipedia.org/wiki/Perfect_market http://en.wikipedia.org/wiki/Perfect_market
tomasien 12y ago
This isn't about crowd funding at all its about payment processing. Makes the title pretty misleading. As somebody who spends virtually all my time running a company combatting online payment fees I love anything that seeks to shed light on the horrific online payment processing fees but this title seems completely mismatched to the content.
- antidaily 12y ago
  Yes it is. Some sites take 5-7% on top of processing fees.
BenjaminN 12y ago
Is that guy saying Paypal is crowdfunding? WTF.
jakobegger 12y ago
I think the title is a bit misleading. The article only talks about payment processing fees. The situation for crowdfunding is even worse. Crowdfunding platforms like kickstarter take an additional 5% fee... But of course, there is a way around some of the fees charged by paypal or stripe. You can open your own merchant account and handle card payments yourself; then you might get lower per-transaction fees. But then you need to do a lot of bureaucratic nonsense that will probably end up costing you more...
notahacker 12y ago
We're living in a world where anyone, anywhere in the world can raise money from complete strangers, with essentially no oversight into whether the money actually is effectively directed towards what they claim it's going to be, and some financial intermediary takes single digit fees for doing so[1]. Sounds rather low compared with the cost of sending out emissaries to persuade people to part with money by hand, or dealing with the rich people and financial institutions that traditionally sponsor such programmes and their expectations... [1]not to mention the crowdfunding platform, which often takes a larger chunk of fees for providing a pretty interface to the payments infrastructure, some eyeballs and some t&cs but apparently isn't subject to the same criticism?
egypturnash 12y ago
shrug As someone who's done Kickstarters for comic books, it's still a hell of a lot less expensive than printing a ton of books on spec and getting them into the bookstore/comic shop distribution system. You'll lose like 50-75% of your cover price to all the middlemen involved in that. When you plan your campaign, you look at the cuts taken by your crowdfunding site and its payment processor, and you work out all your numbers with that taken into account. I just go with a flat 10% of the take going to Kickstarter and Amazon. And if you're shipping stuff, build a lot of slack into the budget for that too. It keeps creeping up. If 2% of the final number either way matters to you, then good luck finding a way to take payments without them. I mean, yeah, it'd be nice to live in a world without payment fees, sure. You'd have to battle the huge amounts of money banks have available to pour int politics. Have fun tilting at that windmill, Hackeress.
- delinka 12y ago
  To add to your comment, it's not so much that banks have money to pour into politics. It's that A) the infrastructure to process the payments has a tangible cost and B) that fraudulent transactions need some form of insurance. B) is a large part of the system.
corbet 12y ago
I have no love for the payments industry, but this article overstates things a bit. I dropped out when it started ranting about charging credit-card-level fees for debit cards. There is a reason why those cards are run as credit from an online site - there's no alternative. Have you ever typed a PIN number into a web site? The whole infrastructure is set up to make it impossible (in theory) to capture and store the PIN number; it's supposed to be proof that the card holder was present. That property is not present for arbitrary web sites, so they have to run the cards as credit.
- sleepyhead 12y ago
  Perhaps in the US. In other parts of the world you can use debit cards online. Far from as common as it should be though. Fees are naturally much lower for such transactions.
  - technomancy 12y ago
    In the US, you're basically responsible for fraud on your debit purchases (banks often make vague claims otherwise, but it's very hit-or-miss whether they'll back them up), while you are completely protected from fraud on a credit card. So using a debit card with a merchant you don't completely trust is very risky.
  - rhino369 12y ago
    Do you type in your pin?
    - M2Ys4U 12y ago
      UK position here, almost all card transactions use 3-D Secure[0] rather than making the user enter their PIN. I could rant about how bad the 3-D Secure idea is, but that's another discussion entirely. [0] https://en.wikipedia.org/wiki/3-D_Secure https://en.wikipedia.org/wiki/3-D_Secure
    - mtmail 12y ago
      In Germany the debit card would be tied to a bank account. In that case you select a different payment method and just type in your (SEPA) bank account number. For VISA debit and credit cards some banks now require online PIN (different from the card PIN) and then send a transaction code to your mobile which you type into the web form.
deleted 12y ago
[deleted]
al2o3cr 12y ago
"For the record, MOST online payment processors have been treating debit card transactions like credit card transactions, and therefore charge the higher interchange -- even when they have no legal right to do so." Erm, you are aware that lower interchange fees for debit cards used at point-of-sale is because users have to type in a PIN on a (nominally) secure terminal? That reduces fraud risk, so the rate is lower. Most payment UIs don't prompt for PIN, so they don't get the rate. Tighten down your tinfoil hat before typing next time. (full disclosure: I'm a developer at a payment processor)
- InclinedPlane 12y ago
  The fee will be different even for a credit card depending on whether or not the card is present.
stevendaniels 12y ago
Here's a breakdown of who gets what fees during payment processing: 1. Credit Card issuer. They get the bulk of the fees because they assume all cardholder risks. Besides fraud risk, they also care about the riskiness of the loan to the cardholder. 2. Gateway / Third Party Processor. The gateway helps a merchant process some part of the fees(e.g. tokenization, authorizations, settlements, etc.). Generally, they get a smallest percentage of the transaction. Authorize.net or Stripe would be examples of these. 3. Merchant's bank. They basically buy a merchant's credit/debit sales. They get a percentage of the transaction. If your transaction volume is high enough, you can probably convince your bank to lower your rate. 4. Visa/MC. Technically, they don't get anything. However, banks are required to pay dues in order to offer or process MC or Visa cards. Some other things to note: Online sites often use a Gateway directly and don't have a merchant bank. In those cases, the Gateway is acting as both a gateway and a merchant's bank. Issuing banks (the bank that gives customers a credit card) charge higher fees for reward cards so that they can provide customers with rewards. Rewards cards are annoying for merchants because one can't always tell if a card is a reward card or a regular credit card. Additionally, fees for different rewards are different. These fees can be found in the voluminous fine print in your credit card agreements.
TimPC 12y ago
The merchant complaint is legitimate: Many credit cards have variable rates depending on the type of credit card. Many premium cards have higher transaction rates and a merchant is forced to accept all cards of that brand or none. So no, a credit card is not just a credit card and a debit card is not just a debit card. That simplification can happen at the 2.9% + $0.30 level, but many of the discounted rates get much more complicated with tiers for various cards -> You are extremely unlikely to get a 1% rate at high volume on a 1.25% cashback card for example.
HeyLaughingBoy 12y ago
If card processing fees bother her so much, then why doesn't she take checks/cheques? I'd hazard a guess that after a few weeks of doing that, the overhead of card processing looks pretty good.
cnst 12y ago
Crowdfunding is by far not the worst offender in all of these fees. What about event tickets? Even http://www.dnalounge.com/ http://www.dnalounge.com/ charges outrageous "service" fees when buying tickets online. For NYE, the ticket price is 50$, service fee is another 10$ -- that's some 20% commission! (And not at all unique to NYE, either.)
mike_hearn 12y ago
For the last eight months I have been working on an app called Lighthouse. It's nearly ready for public (beta) release, probably in the next couple of weeks. Lighthouse is an all-or-nothing crowdfunding app that uses the smart contracts feature of the Bitcoin protocol. You do not need to deposit money with a third party site. Anyone can create a project, or pledge money to someone elses project and revoke that pledge before the project is claimed if they want the money back. Unlike Kickstarter, there are no fees and it works in any country, although you do have to use Bitcoin so you are exposed to volatility and exchange fees (if your costs are in some other currency which is quite likely). Over time I expect and hope that volatility will slowly decrease, and there are lots of ways to optimise currency exchange fees. So whilst this is somewhat exploratory today, I hope it can grow into a real competitor over the long run (5-10 years). http://blog.vinumeris.com/2014/09/12/lighthouse-alpha-now-open-source/ http://blog.vinumeris.com/2014/09/12/lighthouse-alpha-now-op...

57 points by shawnee_ 12y ago

Given the business model of credit cards, where the banks eat losses due to fraud, there is some justification for a percentage of the transaction since the liability involved in a $1000 fraud transaction is much greater than that of a $10 fraud transaction. In some other business model that might not be the case, but on that kind of platform you might have much stronger technical and procedural protections against fraud so it might be like PayPal where if you do anything that is even slightly sketchy (i.e. a crowdfunding campaign) you get kicked.

dangrossman 12y ago
A bit tangential to your point, but... banks generally don't eat losses due to common credit card fraud (a stolen/cloned card number being misused). When you call your bank and say that some charges on your card were unauthorized, and they give you back that money, it immediately comes out of the bank accounts of the stores that made the charges. They are paying for the reversals, not the card issuer. Each of those stores also pays a significant chargeback fee, which more than covers the cost of that customer support agent that took the call, and reissuing the physical card if necessary. Plus, much of the transaction fee goes to paying out rewards to card holders and to the processing networks that make everything work (e.g. VisaNet), rather than to the banks' profits. That reflects the fact that the banks generally don't have significant fraud losses to cover. The cost to banks from reissuing cards after massive data breaches at major retailers is a relatively new phenomenon and isn't priced into those fees.
- toomuchtodo 12y ago
  Could crowdfunding sites require ACH transfers instead of credit card network processing, thereby substantially reducing their processing fees?
  - dublinben 12y ago
    Dwolla has been working on a better interface for that, and their transaction costs are far lower than anything mentioned in this article.
    - toomuchtodo 12y ago
      I'm aware of Dwolla, but unsure why an additional middleman is required. Direct ACH transfers cost 15-20 cents/transaction, and Dwolla isn't required to do that, just a bank that supports you submitting properly formatted text files.
- corbet 12y ago
  That actually depends. Online sites, like the one I run, get to pay chargebacks and the associated fees ($10-25, in my experience). The situation is different for card-present transactions, though; in that case, the merchant is usually covered.

Avalaxy 12y ago

I hope we will see more crowdfunding websites adopt Bitcoin. It allows projects to get a lot more money because basically all of the money could go to them.

Marazan 12y ago
Apart from, you know, the Bitcoin transaction fees. Plus the fees to convert money into Bitcoin.
- illumen 12y ago
  Plus fraud costs.
  - lightlike 12y ago
    what fraud costs? please elaborate
  - yebyen 12y ago
    What fraud costs? Bitcoin transactions are (basically) irreversible. You either received them or you didn't, and if your policy is to allow refunds to your customers (when they report a fraud or for any other reason) then all you have to do is send it back. So, what fraud costs?
- lightlike 12y ago
  bitcoin transaction fees do not depend on the amount transferred. for a standard p2pk transaction of any amount the fee is less than 50 cents https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees
  - mike_hearn 12y ago
    Less than half a cent, actually. Many people pay more than they need for no real reason.
ig1 12y ago

Svip 12y ago

I wonder if the typo in the HN submission (crow instead of crowd) was intentional.

dang 12y ago
Thanks, we missed that one.

dictum 12y ago

Obligatory non-US HNer snark: I wish I my credit card processing rates were 2.9% + 30¢ expensive, not 8.9% expensive.

a_c_s 12y ago

The overblown rhetoric used makes this piece hard to read. For example, charging a rate that the market will bear for a product like payment processing is simply the free market, not some kind of 'evil' practice.

rqebmm 12y ago
True, but it is a LITTLE suspicious that they all charge exactly the same amount despite competition in the space.
- msherry 12y ago
  They can only go so low. Here's a pdf of Visa's interchange rates: http://usa.visa.com/download/merchants/visa-usa-interchange-reimbursement-fees-april2013.pdf http://usa.visa.com/download/merchants/visa-usa-interchange-... . (Mastercard is similar, and Amex is even more expensive.) It's 10 dense pages of tables, but it essentially sets a lower bound on the pricing you can get from one of the companies discussed in the article. Everyone would love to see the card networks lower (and simplify) their fees, but that's not what's being railed against in the article.
  - mtmail 12y ago
    The European Commission is planning to cap (VISA, Mastercard etc) card fees to 0.2% of the transaction. http://www.businessweek.com/news/2014-10-31/eu-bid-to-limit-card-fees-poised-to-win-nations-backing http://www.businessweek.com/news/2014-10-31/eu-bid-to-limit-...
munificent 12y ago
> simply the free market This is a common misconception. A market is only "free" to the degree that it is perfect[1]. I hope we'd all agree that payment processing is nowhere near a perfect market. The barriers to entry are quite high. It takes a huge amount of lawyers and regulation wrangling to get a new financial startup up and running. Consumers certainly do not have clear information or free choice about which payment processor to use. I'm sure there are other things making this area far from perfect. I like the idea of the free market, and it seems to work tolerably well for a lot of things, but I really get frustrated by this idea that it's a magic bullet. Free markets are pretty great for determining prices for brain-dead simple physical commodities that are simple to produce. As soon as you start straying from that, they very quickly become inefficient. [1]: http://en.wikipedia.org/wiki/Perfect_market http://en.wikipedia.org/wiki/Perfect_market

tomasien 12y ago

This isn't about crowd funding at all its about payment processing. Makes the title pretty misleading. As somebody who spends virtually all my time running a company combatting online payment fees I love anything that seeks to shed light on the horrific online payment processing fees but this title seems completely mismatched to the content.

antidaily 12y ago
Yes it is. Some sites take 5-7% on top of processing fees.

BenjaminN 12y ago

Is that guy saying Paypal is crowdfunding? WTF.

jakobegger 12y ago

I think the title is a bit misleading. The article only talks about payment processing fees. The situation for crowdfunding is even worse. Crowdfunding platforms like kickstarter take an additional 5% fee... But of course, there is a way around some of the fees charged by paypal or stripe. You can open your own merchant account and handle card payments yourself; then you might get lower per-transaction fees. But then you need to do a lot of bureaucratic nonsense that will probably end up costing you more...

notahacker 12y ago

We're living in a world where anyone, anywhere in the world can raise money from complete strangers, with essentially no oversight into whether the money actually is effectively directed towards what they claim it's going to be, and some financial intermediary takes single digit fees for doing so[1]. Sounds rather low compared with the cost of sending out emissaries to persuade people to part with money by hand, or dealing with the rich people and financial institutions that traditionally sponsor such programmes and their expectations... [1]not to mention the crowdfunding platform, which often takes a larger chunk of fees for providing a pretty interface to the payments infrastructure, some eyeballs and some t&cs but apparently isn't subject to the same criticism?

egypturnash 12y ago

shrug As someone who's done Kickstarters for comic books, it's still a hell of a lot less expensive than printing a ton of books on spec and getting them into the bookstore/comic shop distribution system. You'll lose like 50-75% of your cover price to all the middlemen involved in that. When you plan your campaign, you look at the cuts taken by your crowdfunding site and its payment processor, and you work out all your numbers with that taken into account. I just go with a flat 10% of the take going to Kickstarter and Amazon. And if you're shipping stuff, build a lot of slack into the budget for that too. It keeps creeping up. If 2% of the final number either way matters to you, then good luck finding a way to take payments without them. I mean, yeah, it'd be nice to live in a world without payment fees, sure. You'd have to battle the huge amounts of money banks have available to pour int politics. Have fun tilting at that windmill, Hackeress.

delinka 12y ago
To add to your comment, it's not so much that banks have money to pour into politics. It's that A) the infrastructure to process the payments has a tangible cost and B) that fraudulent transactions need some form of insurance. B) is a large part of the system.

corbet 12y ago

I have no love for the payments industry, but this article overstates things a bit. I dropped out when it started ranting about charging credit-card-level fees for debit cards. There is a reason why those cards are run as credit from an online site - there's no alternative. Have you ever typed a PIN number into a web site? The whole infrastructure is set up to make it impossible (in theory) to capture and store the PIN number; it's supposed to be proof that the card holder was present. That property is not present for arbitrary web sites, so they have to run the cards as credit.

sleepyhead 12y ago
Perhaps in the US. In other parts of the world you can use debit cards online. Far from as common as it should be though. Fees are naturally much lower for such transactions.
- technomancy 12y ago
  In the US, you're basically responsible for fraud on your debit purchases (banks often make vague claims otherwise, but it's very hit-or-miss whether they'll back them up), while you are completely protected from fraud on a credit card. So using a debit card with a merchant you don't completely trust is very risky.
- rhino369 12y ago
  Do you type in your pin?
  - M2Ys4U 12y ago
    UK position here, almost all card transactions use 3-D Secure[0] rather than making the user enter their PIN. I could rant about how bad the 3-D Secure idea is, but that's another discussion entirely. [0] https://en.wikipedia.org/wiki/3-D_Secure https://en.wikipedia.org/wiki/3-D_Secure
  - mtmail 12y ago
    In Germany the debit card would be tied to a bank account. In that case you select a different payment method and just type in your (SEPA) bank account number. For VISA debit and credit cards some banks now require online PIN (different from the card PIN) and then send a transaction code to your mobile which you type into the web form.

deleted 12y ago

[deleted]

al2o3cr 12y ago

"For the record, MOST online payment processors have been treating debit card transactions like credit card transactions, and therefore charge the higher interchange -- even when they have no legal right to do so." Erm, you are aware that lower interchange fees for debit cards used at point-of-sale is because users have to type in a PIN on a (nominally) secure terminal? That reduces fraud risk, so the rate is lower. Most payment UIs don't prompt for PIN, so they don't get the rate. Tighten down your tinfoil hat before typing next time. (full disclosure: I'm a developer at a payment processor)

InclinedPlane 12y ago
The fee will be different even for a credit card depending on whether or not the card is present.

stevendaniels 12y ago

Here's a breakdown of who gets what fees during payment processing: 1. Credit Card issuer. They get the bulk of the fees because they assume all cardholder risks. Besides fraud risk, they also care about the riskiness of the loan to the cardholder. 2. Gateway / Third Party Processor. The gateway helps a merchant process some part of the fees(e.g. tokenization, authorizations, settlements, etc.). Generally, they get a smallest percentage of the transaction. Authorize.net or Stripe would be examples of these. 3. Merchant's bank. They basically buy a merchant's credit/debit sales. They get a percentage of the transaction. If your transaction volume is high enough, you can probably convince your bank to lower your rate. 4. Visa/MC. Technically, they don't get anything. However, banks are required to pay dues in order to offer or process MC or Visa cards. Some other things to note: Online sites often use a Gateway directly and don't have a merchant bank. In those cases, the Gateway is acting as both a gateway and a merchant's bank. Issuing banks (the bank that gives customers a credit card) charge higher fees for reward cards so that they can provide customers with rewards. Rewards cards are annoying for merchants because one can't always tell if a card is a reward card or a regular credit card. Additionally, fees for different rewards are different. These fees can be found in the voluminous fine print in your credit card agreements.

TimPC 12y ago

The merchant complaint is legitimate: Many credit cards have variable rates depending on the type of credit card. Many premium cards have higher transaction rates and a merchant is forced to accept all cards of that brand or none. So no, a credit card is not just a credit card and a debit card is not just a debit card. That simplification can happen at the 2.9% + $0.30 level, but many of the discounted rates get much more complicated with tiers for various cards -> You are extremely unlikely to get a 1% rate at high volume on a 1.25% cashback card for example.

HeyLaughingBoy 12y ago

If card processing fees bother her so much, then why doesn't she take checks/cheques? I'd hazard a guess that after a few weeks of doing that, the overhead of card processing looks pretty good.

cnst 12y ago

Crowdfunding is by far not the worst offender in all of these fees. What about event tickets? Even http://www.dnalounge.com/ http://www.dnalounge.com/ charges outrageous "service" fees when buying tickets online. For NYE, the ticket price is 50$, service fee is another 10$ -- that's some 20% commission! (And not at all unique to NYE, either.)

mike_hearn 12y ago

For the last eight months I have been working on an app called Lighthouse. It's nearly ready for public (beta) release, probably in the next couple of weeks. Lighthouse is an all-or-nothing crowdfunding app that uses the smart contracts feature of the Bitcoin protocol. You do not need to deposit money with a third party site. Anyone can create a project, or pledge money to someone elses project and revoke that pledge before the project is claimed if they want the money back. Unlike Kickstarter, there are no fees and it works in any country, although you do have to use Bitcoin so you are exposed to volatility and exchange fees (if your costs are in some other currency which is quite likely). Over time I expect and hope that volatility will slowly decrease, and there are lots of ways to optimise currency exchange fees. So whilst this is somewhat exploratory today, I hope it can grow into a real competitor over the long run (5-10 years). http://blog.vinumeris.com/2014/09/12/lighthouse-alpha-now-open-source/ http://blog.vinumeris.com/2014/09/12/lighthouse-alpha-now-op...