Challenge

Crowdfunding seemed novel when Kickstarter launched in New York City in 2009, even though people had been pledging money to support creative projects for centuries. In one of the most high-profile examples, the pedestal for the Statue of Liberty was funded with small contributions from thousands of individual donors. But by combining this traditional method with the reach of the internet, Kickstarter quickly helped establish crowdfunding as a powerful way to bring creative projects to life.

With Kickstarter’s “all or nothing” policy, creators set a fundraising goal and a deadline and then promote their idea to backers who pledge money toward the project. If the project raises enough money by the deadline, Kickstarter will charge the backers’ payment method of choice. If a project falls short of its fundraising goal, no one is charged.

This method has helped launch projects that have become household names, such as the Peloton exercise bike. But Kickstarter is also a major funding source for thousands of smaller, independent projects in niche interest areas, such as board games, romance novels, and hot sauces.

As its following of creators and backers continued to grow, Kickstarter wanted to open its platform to people around the world. In 2014 the company chose Stripe to enable this international expansion by making it easier to collect pledges from backers and pay out to creators in multiple currencies and countries. Since that first integration, Kickstarter has continually adapted to emerging trends in the crowdfunding space and found new ways to make its platform more powerful for creators. Alongside those ambitions, the company has needed its payment technology to be just as adaptable.

Kickstarter’s recent priorities included ensuring that its system supports ongoing expansion, allowing the company to quickly enter new markets and adapt the platform for local regulations regarding customer identity verification and payment security. Managing fraud across the entire platform is another key challenge, given that each Kickstarter project attracts different cohorts of backers using a varied mix of payment methods in multiple countries. Each of those payment methods has different user verification methods and ways that bad actors can exploit them to commit fraud, making it difficult to manage fraud risk with a single approach.

At the same time, Kickstarter wanted to make it easier to continue adding new payment methods. Ongoing innovation in payment methods and the flow of new backers to the site every month meant that giving backers more payment options would help projects reach their funding goals – especially in markets where credit and debit cards aren’t widely used.

The success of the crowdfunding model also had Kickstarter considering what new financial services it could offer to help creators beyond the initial fundraising stage – which would require support from its payment system for more than just processing pledges and paying out creators. “Our long-term vision is to support the end-to-end creator journey,” said Sean Leow, Kickstarter’s chief operating officer. “Getting a project out into the world requires more than just a 30-day Kickstarter campaign.”

Solution

Kickstarter’s original implementation of Stripe Payments to process transactions and Stripe Connect to route funds to creators provided a foundation to support the company’s growth and expansion in recent years. Kickstarter has been able to modify its payment processing system to adapt to changing market conditions while adding new features and products from Stripe to support creators, backers, and the company’s own growth plans.

When switching to Stripe in 2014, Kickstarter signed up for a Stripe support plan that has been a vital resource for helping expand and fine-tune its Stripe integration. Working closely with a dedicated support team has helped Kickstarter engineers manage unique integration elements on its platform and adapt to changes and optimisations to Stripe technology over the years. Kickstarter’s finance, trust and safety, community, and legal teams have also relied on Stripe support to answer questions related to revenue and reporting, taxes, risk and compliance, account onboarding, and more.

“We see our Stripe Enterprise Account Team as an extension of our team,” said Jason Goss, Kickstarter’s head of revenue accounting and operations. “They are an invaluable part of the work that we do.”

Adopting Connect has simplified the process for expanding Kickstarter into new markets. Besides allowing Kickstarter to accept payments from more than 195 countries, Connect’s Stripe-hosted onboarding manages the heavy lifting for Know Your Customer verification and other compliance requirements in each new market.

Kickstarter’s Connect integration also helped the company manage the adoption of the PSD2 payments law in the European Union. The new regulations, which include requirements for Strong Customer Authentication, raised potential challenges for Kickstarter because of its unique “off-session” payments model in which backers aren’t charged unless a project reaches its fundraising goal. Kickstarter worked closely with Stripe to map out its fund flows and set up Stripe APIs to ensure the platform remained in compliance with EU regulations while still supporting its core all-or-nothing policy for successfully funding projects.

To help manage payment fraud, Kickstarter adopted Stripe Radar, which uses machine learning trained on the billions of transactions processed on the Stripe network, to analyse data for shifting fraud patterns and potentially risky transactions. Radar automatically blocks transactions deemed the highest risk and sends notifications to Kickststarter’s internal trust and safety team, which can then analyse those transactions alongside signals from other fraud monitoring efforts to either remediate issues promptly or refine its overall techniques for identifying risks such as insincere pledging or account takeovers.

The long-standing relationship with Stripe also allowed Kickstarter to capitalise on Stripe innovations. In 2023, Kickstarter adopted Stripe’s Optimized Checkout Suite to help improve the experience for creators and backers. Kickstarter added the Payment Element to its pledging checkout page, which provided an embedded UI that allows Kickstarter to present a range of payment methods, including credit and debit cards and digital wallets. Adopting the Payment Element also allowed Kickstarter to offer Link, an accelerated checkout tool that reduces friction by saving users’ payment information and auto-filling those details on future transactions. And because the Payment Element is a Stripe-hosted component, no payment data passes through or is stored on Kickstarter’s servers, helping the company stay in full PCI-DSS compliance.

More recently, Stripe has been helping Kickstarter realise its goal of supporting creators beyond the initial fundraising stage. In 2024, Kickstarter rolled out a new feature called Late Pledges, which allows backers to donate money to projects after they’ve met their fundraising goal. The flexibility of Stripe technology allowed the Kickstarter team to handle this new form of “on-session” collections alongside its primary “off-session” pledges, adapting the system to handle both the security requirements for these transactions as well as the additional payouts for creators who collect late pledges.

Results

Stripe supports Kickstarter’s expansion to 25 countries

Since switching to Stripe, Kickstarter has expanded from 5 countries to 25, most recently adding Japan, Singapore, Hong Kong, Slovenia, Poland, and Greece. With Connect, the process for establishing a Stripe account in a new region takes only a few minutes once the legal entity and bank account, physical address, and required forms of identity are met. Stripe-hosted onboarding further accelerates go-live time in new markets by handling customer verification requirements.

Radar blocks $9.5 million in fraudulent transactions

Advanced fraud detection provided by Stripe and Radar significantly improved Kickstarter’s fraud prevention capabilities. In the last year, Stripe and Radar automatically blocked $9.5 million in fraudulent charges that likely would have ended in disputes.

Adoption of the Optimized Checkout Suite simplifies the addition of new payment methods and boosts average order value 22%

Using the Payment Element from the Optimized Checkout Suite has made it easier for Kickstarter to add new payment methods, which generated a 22% increase in average order volume. For example, Kickstarter added SEPA Direct Debit in Germany and is exploring the use of off-session ACH payments that Stripe enables.

Link also proved popular with Kickstarter backers immediately after the platform began offering it. In 6 weeks, 7.4% of payers used Link, overtaking Apple Pay both in the number of transactions and dollar value of pledges. Roughly 70% of Link transactions were from returning Link customers, and Kickstarter sees the potential for Link to help further boost pledges from first-time backers. “When a new creator comes to Kickstarter, they bring their own community of friends and family who may not be familiar with crowdfunding. If they get to the checkout page and don’t have a saved payment method, conversion is tougher,” said Goss. “If those new backers have Link, it can unlock a huge number of pledges.”

Kickstarter’s Stripe integration enables future services to support creators

Building on the development of late pledges, Kickstarter continues to envision new ways to support the end-to-end journey for creators. For example, the company is considering opportunities to add banking-as-a-service features through Stripe Treasury to help entrepreneurs manage the costs of shipping, logistics, and fulfilment for successfully funded projects.