PayPal enters the crowd funding market with “Money Pools”
PayPal ventures into the crowd funding market with its Money Pools platform
Crowd funding is indeed a crowded place and PayPal now wants to tap the opportunity to drive its next phase of growth.
PayPal, the e-commerce giant has stepped into the world of crowd funding with Money Pools where groups can raise money and buy things. Earlier, when Airbnb acquired Tilt and shut it down, employees were left gasping as to what would replace it. The startup had said that its “focus will be to incorporate our social payments experience into their product ecosystem.”
Now, the answer has come from a different quarter – PayPal – with its money pooling platform, which is going to rival the already well-established and reputed platform – GoFundMe and other group-based payment and funding platforms. These platforms allow users to create their own pages to enable their contacts contribute to a cause. Users on these platforms can take part in the crowd funding campaigns for a specific item or event, buy a group gift, arrange group trips or pay rents.
PayPal facilitates payments across the world through transactions made on eBay and other electronic payment services. The formerly eBay-owned company now has a market cap of more than $88 billion.
Money Pools, which works similar to GoFundMe, will be available across the Americas, Europe, and Australia. Countries where the service has been launched include Australia, Austria, Belgium, Canada, Denmark, France, Germany, Italy, Netherlands, Norway, Poland, Spain, Sweden, Switzerland, United Kingdom and the United States. However, those with a PayPal account in these countries can use the platform. Users from these countries can access the platform to pool money for various causes. It is a free service if you using your PayPal wallet, a debit card or a bank account linked to your PayPal account. In case you are using a credit card that is linked to your PayPal account but you want currency conversion, then you will have to pay the standard PayPal fees. Once you are through, you can personalize your page and set your priorities so that the contributions appear public or anonymous. You can update the activity feed and share a link to the campaign with an URL which is important for a social campaign.
Although, PayPal entered the payment transfer segment nine years back, its foray in the social payments segment is relatively new. Initially, the payment transfer business was availed by users to pay family and friends. PayPal had also acquired Braintree, an e-commerce payments provider, in the year 2013. This acquisition allowed PayPal the ownership of Venmo, the peer-to-peer money transfer service provider.
Recently, the e-commerce giant has focused on social payments. Some of the steps by the company include – letting people use Facebook Messenger for paying each other and enable retailers to accept Venmo-powered payments. While the Facebook Messenger-based payment system was launched last month, the Venmo-powered payment system was launched a week ago.
However, PayPal’s efforts to enter the social payment segment was not without hurdles. For example, despite being hugely popular for crowd funding causes, GoFundMe, the present competitor of PayPal, only accepts payments via certified charities, not individuals.
Although, the market is full of platforms such as Splitwise and WeTravel which offer crowd funding services, most of them provide crowd funding opportunities for specific causes. While Splitwise lets its users pay their bills, WeTravel is geared towards group trips.