Crowdfunding TipsDaily Project Updates

How to Choose a Payment Gateway for Crowdfunding Software

payment gateway for crowdfunding software

White Label Crowdfunding Software has the sole purpose of collecting funds for your campaign/ project to make it into reality. As it is a matter of money in an online platform, the payment gateway you use for it is a big matter.

No one will want to trust and fund your project if your payment gateway is not reliable, or secure. On the other hand, you will have to make sure that the payment gateway you choose is convenient for both the backers/ funders and you.

There are a lot of things to consider about a payment gateway. We will discuss them in this article.

What is the function of a payment gateway in a crowdfunding software/platform?

The function of a payment gateway in a crowdfunding platform is to safely collect the funds from a backer and deposit it into your account. It usually has three functions.

The first is to validate the credibility of the backer. Second, make sure there are enough funds to make the transaction. Third, approve and transfer the fund into your account. It may sound simple, but a lot of factors are at play here.

For example, in a cryptocurrency payment gateway, the merchant had to verify the current price of the cryptocurrency with the amount of transferred money. They have to do it in real-time because the price of cryptocurrency fluctuates every second.

However, in crowdfunding, there is no such fluctuation. So, it is relatively less complicated than a cryptocurrency payment gateway.

But still, you need to bring all factors under your consideration for choosing your crowdfunding payment gateway.

Things to ask yourself when choosing a payment gateway for
crowdfunding software/ platform

Choosing the right payment gateway for your crowdfunding campaign is very important. If you don’t choose the right one, your audience may fail to fund you and your campaign may not reach its goal.

So before choosing a payment gateway for your business, you should ask the following questions about it to find the best options.

What are the costs of using their services?

If you are using a third-party payment gateway for crowdfunding software, then there are some costs/ fees that you will incur. Usually, a payment gateway will charge you three types of costs.

  • Set-up fees
  • Monthly subscription fees
  • Funds transaction fees

All this cost can cut out a huge portion of your profit if you don’t choose carefully. You will have to choose the most cost-effective method.

That does not mean that you should choose the one that has the least service cost. The payment gateway with the lowest service cost may have low-quality service that can raise a lot of questions on security.
You will need to balance both cost and quality of service to find the best payment gateway. But always try to keep the transaction fees at a minimum. This will save you a lot of funds to work on your campaign/ project.

What types of cards are allowed in that gateway?

As we are talking about online payment gateway, your funders will fund your project using a bank card. Some may use online wallets.

Now there are a lot of cards available in the market and you cannot tell which card will be used by your funders to fund your campaign. You may be able to find out the most used cards in your geolocation and choose a payment gateway that supports those cards. That will be a good decision, but you may still miss out on the opportunity of collecting funds from backers that use different cards.
That is why we would recommend you to keep all card and digital wallet payment options available for your crowdfunding payments. Indeed, all payment gateway does not have all cards available. In that case, you can choose multiple payment gateways and make them cover each other in terms of cards.

What currencies do they support?

Before looking at what currencies the payment gateway has, ask yourself who your target audience is. If it is the people of your local area, then you would not need to worry about international currencies. But if you are running your campaign internationally and targeting an audience from different countries, then you will have to look at the type of currency your payment gateway accepts.
Even though you are targeting a local audience for funding your campaign, you should always have more than one currency option available. Because some audience living in your locality may be an immigrant and have their home currency deposited in their banks. We would suggest you do some research on your audience for picking up a payment gateway for crowdfunding.

And if you are running your campaign internationally, then make sure to include the main currency of the region/ country you are targeting.

Do they have any geo-location complications?

One of the big problems with online payment gateway is it comes with a lot of geographical complications. The internet may have brought us closer, but the geographical laws are still present and keeping us apart.
Suppose you are running a campaign for card funding from America. You have chosen PayPal as your payment gateway. So, all Americans, Canadians, and other regions nearby would not have any problems backing your campaign. But someone from Asia will have trouble because of the high transaction fees.

High transaction fees will discourage them from backing your crowdfunding campaign. That is why you need to choose a payment gateway that has fewer transaction fees for international transactions.

But don’t take the gateway with the lowest transaction fee immediately. You will also have to ensure security, reliability, and other factors of the payment gateway. Remember, it is all about balance.

What is their holding/ processing time?

Next in line is their holding/ processing time. Some gateways immediately approved the transaction. You can receive the fund of your funders immediately and it will also show up in the campaign.

But some payment gateways hold the money and put it into your account for some business days, like Apple Pay and WePay. That is not necessarily a bad thing. They do it for aiding charge-backs and refunds. The period of holding the money before dropping them into your account can vary for different gateways.

As we are talking about crowdfunding, you should pick a gateway that has not more than 2 days of holding period. That is because a lot of crowdfunding sites like Kickstarter and Indiegogo have a deadline for each campaign. Suppose if a funder funded your account on the last day, and it takes 2 days for it to process, then you are not getting that fund.

It may happen that because of not getting that last fund, your campaign failed. And some platforms do not allow you to have the collected funds if your campaign fails.

What security do they offer?

Security of the patent gateway is another thing that you must consider. It matters the most. People have to store some financial and personal information in the gateway to make the transaction happen. That information is confidential. They often contain sensitive information. Any leakage of that information can cost them heavily.
That is why you should choose a payment gateway that can offer you the most financial and informational security. Also, it has to be well-known to the general public.

If you have chosen a payment gateway that none recognizes, then no one will easily trust it no matter how high security it offers.

You can also look for some in-depth advanced security protocols. For example, PiPay gateway has a fraud detection protocol. This protocol will detect any fraudulent transaction. This serves both parties. The funders don’t have to lose money by false transactions. And the campaign runner does not have to be confused with fraud transactions.
Besides that, you should be sure that they are level-1 PCI DSS compliant. This shall ensure good security for your campaign and encourage funders.

Do they have any limit in their transaction?

Next, we need to think of the limit of the gateway. That is how much money a funder is allowed to transfer at once in the gateway. But some payment gateways implement an upper limit which is applied every month.
That is something to worry about for big businesses with high monthly transactions. But since we are talking about crowdfunding, this should not be a problem. Then again, you should check the upper limit of each payment gateway to make sure it does not restrict your target fundings.

Different payment methos have different upper limits. If your target exceeds the upper limit of them, then you can talk with their authority and may come to an understanding. There is always room for negotiations.

Can their service be integrated with my system?

Now one important thing to consider is whether the payment method you have chosen can be integrated with the crowdfunding website you have chosen. It may not surprise you to know that many crowdfunding websites/ platforms have strictly banned the usage of some particular payment gateways.

The reason could be corporate rivalry or other conflicts.

Besides that, there is the question of technology. Will the technology of the payment gateway match with the technology of the crowdfunding platform? Both these factors come to play.

We cannot use a payment method for collecting funds if it cannot integrate with the platform, or the platform has some conflict with the gateway.

That is why you need to consider both these factors and kick out all the payment gateways that cannot be integrated and have some corporate rivalry.

Do they have non-hosted payment services available?

Lastly, we will have to see if the payment gateway has a non-hosted payment service available. Let us explain to you what a non-hosted payment service is.

A non-hosted payment service allows the payment gateway to verify and make the transaction without taking the user to the website of the payment gateway. This is more preferable because the funder does not have to go through the extra trouble of putting their information on the different websites just to make a small transaction.

On the other hand, a hated payment service takes place on the website of the payment method. This will redirect you to the website of the payment gateway and you will have to put your information there again.

Which one is better? In case of convenience, we will say the non-hosted payment services are better. Besides, funders will love to have a convenient funding solution, right?

So, these were the questions that you should ask yourself when choosing a payment method for crowdfunding. Be sure to ask them all.

One more thing. Do not go with the cheapest solution in the market. They may cost less, but they will lack security and quality. That is why you should balance all the factors and choose the best payment gateway from that. You will have to think of the funders as well as for yourself in crowdfunding.

Our Recommended Payment Gateways for Crowdfunding

There is a lot of payment gateway available in the market. It is very confusing to choose from them. We will not directly point your finger at one payment gateway. Rather we can give you our recommendation of different payment gateways that you can choose for crowdfunding.

  • Apple Pay

Apple Pay is one of the most reliable online payment gateway because of its high security
and confidentiality.

  • PayPal

PayPal has no subscription/ membership cost. This makes it one of the best choices for an online payment gateway.

  • Stripe

Stipe was built to make an easy payment system for online transactions. It is one of the most convenient online payment gateway that you can choose.

  • TNG Wallet

TNG Wallet is the number one payment gateway in Hong Kong. So, if you are targeting Hong Kong citizens, then use a TNG wallet.

  • WePay

WePay has a very easy-to-use system for making online transactions. This makes it one of the best payment gateway option for beginners.


Every payment gateway is unique in its way. However, we need to balance all factors of choosing an online payment gateway to make the best of our opportunities.
We hope that our guide can help you with it. All the best for your crowdfunding campaign.

4.9/5 - (27 votes)

You may also like

Comments are closed.