An external payment provider (also known as a payment service provider) is a specialized company that handles payment processing for a platform—such as card or PayPal payments, security checks, and the secure processing of payment data.
At Startnext, we use Stripe for this.
What exactly does an external payment provider do?
An external payment provider helps with the following, among other things:
- Integrate various payment methods (e.g., credit card, direct debit, digital wallets—depending on the country)
- Processing and protecting payment data securely (for example, Startnext does not simply store "your credit card number" in plain text)
- Protecting transactions against abuse and fraud
- comply with legal requirements (e.g., identity/business verification (KYC) for new users)
Why does Startnext use Stripe?
Stripe allows us to:
- Integrate payment methods on a larger (including international) scale
- comply with high security standards when handling payment data
- implement the necessary verification and compliance checks for payouts
When are funds actually debited in crowdfunding?
Many contributions are not collected until the campaign has ended successfully. As a result, payment processing fees are typically incurred only when the funds are actually disbursed.