WePay vs. PayPal for Crowdfunding

A question Launcht often receives from potential clients is why we use the WePay payment system as opposed to PayPal, a more well-known Pay-Key-e1368190509599 (200x100)payment processor.  The answer is pretty simple.  WePay is better.  Online crowdfunding is still a relatively new tool to raise money but was especially so a few years ago.  Back in early 2011, when Launcht first established its white-label platform service, WePay understood crowdfunding and had a simple API to implement and get up and running with. Given the recent PayPal news in regards to freezing payments for crowdfunding projects it is clear that WePay understands crowdfunding and PayPal doesn’t.

WePay was founded in 2008 by Rich Aberman and Bill Clerico in Boston, Massachusetts.  The inspiration for WePay is that Aberman had difficulties in finding a direct payment processor to raise money for a bachelor party.  In particular, PayPal presented many technical difficulties for Aberman as he sought to celebrate a friend’s special occasion.  This simple event is what inspired WePay, which aimed to simplify the process of transferring funds online.

WePay operates using a simple application programming interface (API) that has made it easy for Launcht and other WePay partners to implement.  Aberman and Clerico originally saw that other payment processors offered similar payment processing interfaces but needlessly complicated the software.  WePay coupled their ease of use with a fair pricing structure which allowed not only WePay to benefit but also individuals or startups who chose to use their software.  WePay was an early adopter of crowdfunding (understanding its immense potential for business) and was a relatively young startup, compared to other payments behemoths. For all these reasons, Launcht chose WePay.

The choice was made easier because back in 2011, PayPal was convinced that crowdfunding violated their terms of use, might have been illegal, and they were certainly not willing to support crowdfunding campaigns.  This attitude has changed over time, as PayPal has played Johnny-come-lately to the crowdfunding party, but issues have arisen over the past few months which reflect their continued poor understanding of how crowdfunding operates.  In regards to freezing accounts of crowdfunding platforms, PayPal has the tendency to only fix these issues after media backlash.  This causes unnecessary headaches for campaigns that have donors but could potentially lose access to funds at any time due to PayPal’s shifting policies.

Tomer Barel, VP of Risk Management at PayPal, recently published a blog post on the state of crowdfunding and PayPal.  In his post, Barel said that PayPal is now overhauling its approach to crowdfunding with hopes of avoiding shutdowns of legitimate campaigns. PayPal would have found itself in the driver’s seat with crowdfunding payment processing, had they adapted years ago. Even now, PayPal is only attempting positive changes after intense media scrutiny, as opposed to taking a more proactive position in the industry.  This is why Launcht will continue to work with WePay, a processor at the forefront of the crowdfunding industry.

To learn more about the white-label crowdfunding platforms that Launcht provides, please click here.

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