Hold-up’s and understanding the Crowdfunding ecosystem.

…As well as (hopefully) offering a clear explanation (for the current hold up) to our eager community and alleviating the fears of our most ‘engaged’ supporters, I’m also writing this blog, to serve as a Knowledge base for anyone in the UK, who might be considering a Crowdsourcing campaign.

The main cause of our ‘lateness’ was, as most of you know, an error that I made. Kickstarter’s account verification system could not validate my personal address, so they asked me to provide a supporting document with the application… So, in a rush, I picked up the first utility bill I could find, took a photo of it and sent it along. – Turns out that it was over a year old, this is bad.

…Because of this error, it would now mean that we’d have to deal with proper ‘bonafide hoomans’ to get our application over the line. This is also bad (and not a quick process).

Long story short; that’s sorted out now, but the experience spooked us enough to prompt a full audit on our facilitation model, where we discovered another ‘potential’ problem.

(UK Crowdfunders, listen up)… At the ‘very beginning’, the decision was taken to use a borderless account to receive pledges from Kickstarter (cheaper exchange rates, instant set up, no bank charges etc etc etc), however, unbeknown to us, Kickstarter had recently changed their payment solution form ‘Amazon Flexible Payments’ to Stripe.

…In some ways it makes the whole process more simple, but NOT if you’re using a borderless remuneration system (like TransferWise, Revolut or ePayments).

Here’s the unique set of circumstances, which make this method more complicated than it should be (for UK businesses anyway)…

When setting up a campaign on KS, the only banking identifier you’re asked for (if you’re based in the UK) is your IBAN number, so no supplementary account numbers, sort codes or routing numbers. Now, a lot (Est 70%) of the borderless account providers that we came across, use a pooled or ‘generic IBAN’, then route the money to individual accounts based on supplemental identifiers (like I said; account numbers, sort codes etc). – The problems arise if you’re successfully funded and KS pay out…

…There’s no way for the provider to identify who the money belongs to and more often than not (because their aggregated IBAN is just a ‘void’ without other identifiers), they’ll return the funds… This is VERY bad.

So, what you need is an account that provides a UNIQUE IBAN number. After a LOT of research, we were only able to find two providers that offer the full set of services (unique IBAN, UK account numbers, Multi-currency capability)… This is where it gets really complicated. In order for the account providers to offer this combination of products, what they actually do is set up multiple accounts under one hub; so, a UK bank (for accepting GBP) and Eurozone bank (for euros etc), which is fine if you live in the Eurozone (I’ll explain why shortly), which the UK technically doesn’t; nothing to do with Brexit, it’s down to us simply retaining the GBP.

Kickstarter will ONLY pay out in your native currency and the accounts that offer unique IBAN functionality will only (for now) accept Euros as their settlement currency. Still with me? Yep, this is bad.

Fundamentally, that means, if you live in a country who’s primary currency is the Euro, you’re all good; borderless banking is 100% the way to go for ‘Kickstarters’. I would recommend Transferwise, Revolut (which does offer a GB IBAN number/account – but still only accepts Euro’s into it – go figure) or ePayments. If you’re in the UK, there is currently NO borderless banking provider that will take GBP via IBAN (unless it’s an aggregated or ‘pooled’ number, which is useless), period.

So, to cut a VERY long story short, we’ve had to suck it up and open a High Street Business account. This means stupid charges, inflated exchange rates and multiple layers of bureaucracy, which do nothing other than add ‘flab’ and ‘time’ to your hopes and dreams.

So, a message to all who’ve been following us over the last few months… Firstly, thanks for hanging in there. As far as launch date goes, well, we’ve sorted the Kickstarter problem, now we’re just waiting for ‘heir Barclays’ to issue our account, and that my friends, might be a day or two.