ChipIn Fees
When we launched ChipIn in Nov, 2006, we guaranteed all users that our system would remain free until the end of 2006. We made that promise so that we could get a good base of users on our system and to also acknowledge that as a new service we would have some hiccups. I am glad to report that we had no incidents of money being lost or not tracked by our system. But the realities of starting a new company is that we have to start thinking about cutting our costs and more importantly limiting our liability.
Our business model has been simple. We allow organizers to either accept money directly via their Paypal account or ChipIn holds the money until it is claimed. Every time we accept money on an organizer’s behalf we incur a 2.9% and $.30 fee on that transaction. We also get hit with the cost of risk management. That means every time someone reverses a contribution, or a fraudulent transaction occurs, ChipIn eats the cost.
We want to make sure that organizers can continue to use ChipIn to collect money while incurring the least cost as possible. So we decided to roll out a new fee structure that I hope accomplishes our goal.
1) ChipIn will continue to charge NO fees to organizers who collect money directly to their Paypal account.
2) For organizers that choose to use ChipIn to hold funds until their event ends, we will be charging a 3.9% fee to cover our credit card acceptance fees and administrative overhead.
3) We have also removed the option to claim money via checks. It was a huge amount of time to print the checks, write a letter, and put a stamp on the envelope. Considering this change as a way to save trees. Organizers can still claim money via ACH to their bank account or via Paypal.
We are not an eyeball dotcom.. in that we are not putting advertisement on the site to generate revenue. I believe that we are offering a valuable service to help organizers collect money. We just need to start finding ways to cover our costs and risks. Thanks again for your support!
February 5th, 2007 at 6:01 am
Just letting you know that while your blog here mentions that you will no longer send checks. The regular doc still mentions checks as a method of payment.
February 6th, 2007 at 7:40 am
[...] 1) Have all contributions go directly to the organizer’s PayPal account. Chipin charges NO fees for this payment method and organizers are only subject to Paypal fees.2) Choose ChipIn to hold the money and claim it via ACH or Paypal when the event ends. We will be instituting a 3.9% fee for this option to cover our credit card acceptance fees. See http://blog.chipin.com/2007/01/10/chipin-fees/ for more information. [...]
December 2nd, 2008 at 10:50 pm
[...] ChipIn doesn’t charge any fees to either contributors or organizers of events. The payments that are sent directly to the organizer’s Paypal account are only subject to the fees established by PayPal. Please refer to your PayPal account for a detailed fee structure. However, if you choose, you can have ChipIn hold the funds you receive and retrieve them via ACH or PayPal when the campaign ends. This option does carry a 3.9% fee to cover credit card processing fees. [...]