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Unglue.it payment options: Amazon vs. Paypal

When we were deciding on how to implement payments in Unglue.it, we considered two options, Paypal and Amazon Payments. We needed a flexible, easy to use system with the flexibility to implement campaigns where nobody’s credit card gets charged until a campaign succeeds. There were two providers whose systems were in use by similar crowd-funding sites. Kickstarter uses Amazon, and IndieGoGo uses Paypal, for example.

Despite having a good reputation for usability, there were two big disadvantages for Amazon. First, Amazon Payments offers no foreign currency transactions; our understanding is that non-US ungluers will only be able to use major credit cards and will need to pay currency conversion fees. This results in a big bite out of pledges, doubly so for non-US rights holders.The other disadvantage to Amazon Payments is that it’s Amazon; many publishers, fearful of Amazon’s dominance of the ebook market, may be wary of participating in a market that requires users to have yet another Amazon relationship.

So we decided on Paypal. But what we didn’t realize was the length of time it would take to convince Paypal that we were a legitimate operation working closely with rights holders and not some pirate ebook emporium. We passed technical review with Paypal in January, but have been in business review for almost 4 months. Apparently Paypal has been revising its policy for crowd-funding sites, and most likely has been deluged with new crowd-funding applications. We’ve had several back-and-forths with the Paypal team, and we fully expect to get Paypal approval at the end of the process. The extra scrutiny will be valuable to us in the long run to the extent that it makes consumers more trusting of Paypal enabled sites.

In the short run, however, we couldn’t afford to wait. So we implemented Amazon’s Flexible Payment system, and that’s what we’ll be launching with on May 17th. We’ll add Paypal payments (as well as other options) later.

We hope that Amazon Payments will meet the needs of most unglued book supporters, at least to start out. We’d love to know your perspective. If you’re outside the US, have you been able to use Amazon Payments? Do you prefer the usability of Amazon or Paypal? Are there other online payment systems you’ve used that you like to see us support?

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4 comments on “Unglue.it payment options: Amazon vs. Paypal

  1. Great news about the launch! I had some difficulty parsing the the Amazon Payments FAQ about international payments:

    Amazon Payments allows U.S. as well as international customers to use major credit cards to make payments on Amazon Payments-powered websites. However, bank account and Amazon Payments account balance transfers are enabled only for US based customers. All transactions are in U.S. dollars.

    I interpreted that as saying that UnglueIt and any rights holders who UnglueIt wanted to give campaign money to would need to have US bank account–not that all the people who might want to pledge on a campaign would need one. I imagine it’s not that big of a deal to require UnglueIt to have a US bank account, and most major publishers (rights holds) have accounts in the US, no? Or am I misreading the FAQ?

    • Thanks for making me realize I needed to clarify this in my own head and on our own FAQ :). And now that I have a clue:

      * A US bank account is not needed to pledge. A major credit card will do. (International ungluers are enthusiastically encouraged to support campaigns!)

      * People might need to have an Amazon account. I’m still a little fuzzy on that one.

      * A US bank account IS needed to receive funds. There’s no guarantee that our rights holders (who are likely to be individuals and small publishers, not major houses, for a while) have US bank accounts — in fact, one of our initial rights holders is based abroad. However, as you note, it is not a big deal for Unglue.it to have a US bank account (we already do), and it’s not a problem at this scale for us to receive the funds and cut checks to rights holders (in fact it simplifies things vis-a-vis Amazon’s fee structure, so we’ll do that).

  2. I certainly hope that this is truly an international enterprise by book lovers, authors, and rights holders worldwide and that unglue.it can do whatever is necessary to make that possible.

    That said, I despise PayPal for many reasons which extend over many years and which they seem, given multiple chances, to not care about fixing. I will only use them when I really truly want something and only if there is no other way to pay. I will not use them to make anything resembling an impulse purchase.

    So I guess that I’m saying that I hope you can have both options, or at least some option other than PayPal.

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