Safeness of Crowdfunding
It is normal for someone to be cautious when they first heard of Crowdfunding. As are regarding most new things, people will be sceptical. Does this work? Is this legal? And perhaps most importantly, is this safe? After all, everyone is sceptical when it comes to dealing with hard-earned money and also personal information.
So here we will explain about the lengths that crowdfunding institutions go to for protecting their consumers and also the legal requirements that was dictated by the Federal Trade Commision (FTC) that companies have to follow.
1. Using trusted 3rd party companies to handle payments
This depends on the company, but rather than handling all the payment by themselves, companies will rely on trusted, well-known services to handle the payments. Companies know that when dealing with money, it is better to rely on the professionals of the game.
These 3rd party services are by themselves very strict and diligent in screening their customers (in this case the crowdfunding institutions). One example is Stripe, a payment company that deals with high-profile customers like ANA and Kickstarter. They encrypt all card numbers used for payments, using HTTPS and HSTS for secure connections, and much more to promote safeness of their customers.
So if you find that the crowdfunding platform you’re aiming for is using these safe and secure services to handle the payments, you can already feel alot better about letting them handle the financial transactions of your fundraising projects.
2. Having SSL Connections
First, we need to know what SSL stands for; Secure Sockets Layer. Simply put, this connection means that all information that relays between the web server and the browser is encrypted. With encryption, all data being sent throughout the crowdfunding process, like credit card numbers are safely secured.
How to know if a site is using SSL connections? Just simply look if there is a “https” on the link of the site you are accessing. Also, you can see if there is a “lock” icon is on the left side of the URL.
3. Efforts for the safety of consumers
We can gauge on how much a company is focused on keeping the safety of their customers. And there are several ways we can do this:
- PCI means Payment Card Industry, and it is a universal standard that is being audited by outside 3rd party teams
- A company that is highly ranked in the compliance rating can be trusted better in compared to companies who do not.
Failsafe technology implemented in the service
- This also includes the details like point 2, however companies also work further by implementing failsafe technologies that can automatically reduce rate of mistakes that usually happen with manual work
Policy in regard to the customers
- This also applies to almost all services that you can use in your daily life. Always check the policy that the company provides in terms of the service provided
- For example, do they have refund policy?
Fraud protection guarantees
- What does the company do to protect their customers?
- How do they secure information from the creates the projects? How do they confirm that it is not a fraud?
- In the other hand, what are the guarantees that the project owner receives? This factor should also be considered
- Make sure the company is transparent in conveying this informations
So what does it comes down to?
What is important is to make sufficient research! We all heard of the news where an organization, or even individual who have made a successful project using crowdfunding, garnering million of dollars in support.
However, as good as it sounds, it is never too careful to be wary when we are trying a new service we are not familiar with. And also, like for all services, we must first make sufficient research to make an informed decision!